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Senate panel to vote on controversial Trump Fed pick Shelton

Senate panel to vote on controversial Trump Fed pick Shelton
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A Senate panel will vote later this month on whether to advance President TrumpDonald John TrumpTrump rages against '60 Minutes' for interview with Krebs Cornyn spox: Neera Tanden has 'no chance' of being confirmed as Biden's OMB pick Pa. lawmaker was informed of positive coronavirus test while meeting with Trump: report MORE’s controversial nomination of Judy Shelton to the Federal Reserve board despite earlier doubts about her viability.

The Senate Banking Committee announced Friday that it will vote July 21 on Shelton’s nomination, as well as that of Christopher Waller, the executive vice president of the Federal Reserve Bank of St. Louis, who was nominated to the Fed board in tandem with Shelton in January.

Shelton, the former U.S. director for the European Bank for Reconstruction and Development, faces a narrow but manageable path to confirmation. Democrats are expected to unanimously oppose her nomination and several Republicans have expressed concerns about her unconventional economic stances.

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Shelton had spent decades advocating for tying the U.S. dollar to the value of gold in some capacity and previously supported a North American currency union before backtracking after her Fed nomination. 

She has also flipped from her past criticism of low Fed interest rates and called for the central bank to weaken the dollar in response to foreign exchange rates, mirroring Trump’s evolution after he took office in 2017.

Shelton faced intense criticism from Democrats and questions about her suitability for the Fed from Republicans during her confirmation hearing before the Banking panel in February. Senate Republicans expected Trump to pull the nomination after her hearing, but her impending committee vote indicates a greater degree of GOP confidence in her viability.

Republicans hold a narrow 13-to-12 majority over Democrats on the Banking committee. While Waller will likely clear the panel with wide bipartisan support, not one Democrat is expected to support Shelton.

In a Friday letter, every Democrat on the committee urged Chairman Mike CrapoMichael (Mike) Dean CrapoMnuchin to put 5B in COVID-19 relief funds beyond successor's reach Democrats accuse Mnuchin of sabotaging economy in dispute with Fed Shelton's Fed nomination on knife's edge amid coronavirus-fueled absences MORE (R-Idaho) to hold another hearing on Shelton’s nomination in light of the economic devastation wrought by the pandemic.

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“Based on her answers at the hearing, we are deeply concerned that the situation we are in today would have been worse if Dr. Shelton were already sitting on the Board of Governors,” wrote the Democrats.

“We need to make sure that members of the Federal Reserve can take on the challenges of an economic crisis capably and independently, and in a way that protects the workers, businesses, and communities that make our economy run,” they added. 

That means the opposition of just one GOP member could prevent Shelton from advancing to a full Senate vote, likely dooming her nomination.

Banking panel Republicans Sens. Richard ShelbyRichard Craig ShelbyCongress set for chaotic year-end sprint Spending deal clears obstacle in shutdown fight Trump, Pelosi barrel toward final border wall showdown MORE (Ala.) and Pat ToomeyPatrick (Pat) Joseph ToomeyAppeals court rules NSA's bulk phone data collection illegal Dunford withdraws from consideration to chair coronavirus oversight panel GOP senators push for quick, partial reopening of economy MORE (Pa.) have both expressed support for Shelton’s nomination despite previously voicing concerns about her economic views. Sen. John KennedyJohn Neely KennedyMORE (La.), another GOP Banking panel member, said in February he was undecided about Shelton’s nomination.

If confirmed, Shelton and Waller would occupy the final two vacant spots on the seven-person Fed board of governors. Trump had nominated or announced his intent to nominate four other candidates for those positions since 2017, all of which were opposed by Senate Republicans.

Four of the five current members of the Fed board were nominated to their positions by Trump: Chairman Jerome Powell, Vice Chairman Richard Clarida, Vice Chairman of Supervision Randal Quarles and Governor Michelle Bowman. Powell and Fed Governor Lael Brainard were both nominated to the Fed board by former President Obama, and Powell was elevated by Trump to chairman in 2017.