Manchin’s blow to Biden’s Fed pick reveals weakness of relationship
President Biden’s latest setback with Sen. Joe Manchin (D-W.Va.), who this week derailed his nominee to serve in a key post on the Federal Reserve, shows that the president continues to have serious problems winning over the most important vote in the Senate Democratic caucus.
Senate Democrats felt confident they would be able to confirm Sarah Bloom Raskin, a highly qualified nominee who previously served in the No. 2 position at the Obama-era Treasury Department, to serve as the Fed’s vice chairwoman of supervision.
So they were shocked and exasperated when Manchin announced Monday he would oppose the nominee, forcing her to withdraw her nomination the next day.
The setback raised new questions among Democrats about Biden’s ability to persuade Manchin, who is seen as the most crucial vote in the Senate to getting the president’s agenda enacted into law.
Democrats say they thought Biden would have clicked better with Manchin over the past year.
Asked whether he thought a year ago that Biden and Manchin would have developed better chemistry, Sen. Jon Tester (D-Mont.) said, “Yeah,” adding “I don’t know why” it isn’t better.
“That’s the way it is,” he said somberly.
Biden, who is 79 years old, and Manchin, who is 74, are two old-school Democrats from gritty industrial towns in neighboring states — Farmington, W.Va., and Scranton, Pa. — who have operated closer to the center than the liberal left during much of their careers.
Yet despite Biden’s extensive outreach to Manchin on his Build Back Better Act in the fall of last year and the president’s personal intervention to secure Manchin’s support for the $1.9 trillion American Rescue Plan, they still haven’t gelled as a partnership.
Their relationship hit a low point in December when Manchin announced on “Fox News Sunday” that he wouldn’t vote for the president’s sweeping climate and social spending package. The White House responded angrily, accusing Manchin of breaking a commitment he made to Biden at his home in Wilmington, Del., to support Build Back Better.
Manchin told The Hill Wednesday that Biden never reached out to him personally on Raskin’s nomination but noted that White House officials speak with his staff regularly.
Manchin told Senate colleagues that he had been clear for a while that Raskin was not acceptable to him, so the administration shouldn’t be surprised that her nomination went down in flames, according to Democratic senators. Some of those senators say the White House should have seen it coming.
Manchin said this week he wouldn’t vote for Raskin because he doubted that she fully appreciated what he called the “critical importance of financing an all-of-the above energy policy to meet our nation’s critical energy needs.”
She had come under withering criticism from Republicans for saying the Fed should take into account “the economic repercussions of the impending climate crisis” and should build toward an economy with more jobs in innovative renewable energy industries.
Several Democratic senators said it was an embarrassing setback not to get Manchin’s support for a nominee who had relatively little name ID, yet who would have held an extremely powerful role overseeing the nation’s financial system.
“I’m extremely frustrated. You’re a member of a team, do you have to blow things up time after time on things that are kind of like second- or third-tier issues? The fact that she expressed that the Fed should take into account how climate affects the economy? Of course! They’re supposed to take into account everything that affects the economy,” said a disgruntled Democratic senator who requested anonymity to vent frustration with Manchin.
“He’s the senator for fossil fuels,” the lawmaker fumed.
But the lawmaker also warned that the defeat of Raskin at the hands of Manchin and all 50 Senate Republicans is another major embarrassment after the failure to pass Build Back Better or voting rights legislation, or to enact filibuster reform.
“It has drained the gravitas of the presidency,” the lawmaker said.
Sen. Ben Cardin (D-Md.), who is friends with Raskin and her husband, Rep. Jamie Raskin (D-Md.), said he was surprised and disappointed that Biden couldn’t win Manchin over to support her nomination.
“I thought we could win this one,” he said. “I’m sorry he can’t be more persuasive on this one because I want to see her confirmed.”
Manchin also sunk the nomination of Biden’s pick to serve as the White House budget director, Neera Tanden, last year because of her criticism of Senate Republican and Democratic colleagues and what he called “her overtly partisan statements,” predicting they would have a “toxic” effect.
Senate Banking Committee Chairman Sherrod Brown (D-Ohio) also took a veiled shot at Manchin after he torpedoed Raskin with his public statement.
“Unfortunately, too many of my colleagues ignored the broad bipartisan support from community bankers, top economists, cybersecurity experts, state banking regulators, consumer advocates and so many others. Instead, they fell for the talking points written by the oil industry,” he said.
Republicans who spearheaded opposition to Raskin, however, disputed Brown’s characterization of how the battle played out. They say the American Petroleum Institute and the U.S. Chamber of Commerce did little to nothing to muster opposition to Raskin.
Raskin likely suffered a mortal political blow when independent oil and gas drillers and coal miners wrote to the Banking Committee to raise concerns, such as the difficulty they face right now obtaining new lines of credit as the financial services industry turns away from fossil fuels.
Forty-one oil and gas trade associations wrote a letter to Brown and ranking Sen. Pat Toomey (R-Pa.), warning that “Raskin’s favored policies would wreak havoc with the economy, as financial systems would be reoriented around subjective, political factors.”
The National Mining Association signed onto another letter warning that “the positions held by Ms. Bloom Raskin could result in fewer good-paying American jobs, raise Americans’ energy costs, and harm our national security by increasing our dependence on foreign sources of energy.”
A second Democratic senator who requested anonymity to candidly comment on Biden said the decision to nominate Raskin to serve as the Fed’s vice chairwoman of supervision was tone-deaf given the 50-50 partisan split in the Senate and Manchin’s oft-stated concerns about protecting the domestic fossil fuel industry.
The lawmaker said, “I’m not at all surprised” that Manchin came out against Raskin.
“They got to nominate someone who can get through,” the senator added, speculating that one reason why the Fed has waited so long to raise interest rates to fight inflation is because Fed Chairman Jerome Powell’s nomination to serve a second term as chairman of the central bank has languished for months in the Senate.
One reason why Powell and three other Fed nominees have remained stalled is because of the fight over Raskin.
“She couldn’t get 51 votes and there are plenty of people to put on the Federal Reserve that would get more than 51 votes,” the senator added.
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