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Exclusive: Senate Banking Committee to take action on embattled Fed nominee Judy Shelton next week

Exclusive: Senate Banking Committee to take action on embattled Fed nominee Judy Shelton next week
© Greg Nash

The Senate Banking Committee is expected to mark up Judy Shelton’s nomination to the Federal Reserve next Tuesday, a signal she is expected to pass the panel along with Christopher Waller, another Fed nominee.

Shelton, whose nomination has run into Senate GOP opposition because of her unorthodox views, has been held up for weeks because of skepticism from Sens. John KennedyJohn Neely KennedyMORE (R-La.) and Richard ShelbyRichard Craig ShelbyMcConnell about to school Trump on political power for the last time Overnight Defense: Trump impeached for second time | National Guard at Capitol now armed, swelling to 20K troops for inauguration | Alabama chosen for Space Command home Space Command to be located in Alabama MORE (R-Ala.), two members of the Banking Committee.

Senate Banking Committee Chairman Mike CrapoMichael (Mike) Dean CrapoSweeping COVID-19, spending deal hits speed bumps McConnell in tough position as House eyes earmark return Mnuchin to put 5B in COVID-19 relief funds beyond successor's reach MORE’s (R-Idaho) expected notice of a markup for Shelton and Waller next week is a sign they have the votes to pass the committee, which has 13 Republican members and 12 Democrats.

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Shelton’s and Waller’s markups are expected to take place in executive session and precede a hearing for Dana Wade, President TrumpDonald TrumpFacebook temporarily bans ads for weapons accessories following Capitol riots Sasse, in fiery op-ed, says QAnon is destroying GOP Section 230 worked after the insurrection, but not before: How to regulate social media MORE’s nominee to serve as the Department of Housing and Urban Development’s assistant secretary for housing and federal housing commissioner, and Brian Miller to serve as special inspector general for pandemic recovery.

Trump nominated Wade and Miller in February and April, respectively.

Kennedy was undecided for weeks over how to vote on Shelton, who came under fire for her past support of returning to the gold standard, something that was abandoned in 1971.

A return to the gold standard would play havoc with the Federal Reserve’s balance sheet, which has swelled to more than $6 trillion because of the coronavirus crisis.

Shelton has since backed off her advocacy for returning to the gold standard, telling the Banking Committee in February, “I would not advocate for going back to a prior historical monetary arrangement” and saying Congress has the ultimate authority to “regulate the value of U.S. money.”

Kennedy said he wanted to read more of Shelton's writings before making a decision. Shelby said he would oppose her if another Republican did but pledged not to act on his own to block the nominee.

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Sen. Pat ToomeyPatrick (Pat) Joseph ToomeyGovernment used Patriot Act to gather website visitor logs in 2019 Appeals court rules NSA's bulk phone data collection illegal Dunford withdraws from consideration to chair coronavirus oversight panel MORE (R-Pa.) was also skeptical of Shelton’s nomination but promised in February to vote for her after she pledged to oppose using monetary policy to devalue the dollar.

Shelton wrote to Toomey in a Feb. 25 letter that “statutory decree,” instead of the Fed, “defines the structure, responsibilities, and aims of the U.S. central banking system” and that the central bank does not have authority “to use monetary policy for the purpose of devaluing the dollar.”

Toomey voiced discomfort with Shelton’s views during a Feb. 13 hearing.

“That’s a very, very dangerous path to go down. This beggar-thy-neighbor mutual currency devaluation is not in our interest, and it is not in the mandate of the Fed to pursue it,” he said during Shelton’s confirmation hearing.

Shelton’s biggest backer in the Trump administration is National Economic Council Director Larry KudlowLarry KudlowMORE, according Senate sources familiar with the behind-the-scenes wrangling over her nomination.

A spokeswoman for the Banking Committee declined to comment on the markup before it is publicly announced.

"All hearings and markups are publicly announced when they are scheduled," Amanda Critchfield said.

A spokesperson for Kennedy did not immediately respond to a request for comment.

Updated at 11:15 a.m.