Trump nominee’s long road to Fed may be dead end

Judy Shelton’s long, strange trip to the Federal Reserve Board may have finally reached a dead-end. 

President Trump’s controversial Fed nominee stalled Tuesday when a procedural vote to advance her nomination failed in the Senate. The coronavirus-related absences of Republican Sens. Chuck Grassley (Iowa) and Rick Scott (Fla.), both of whom since tested positive for COVID-19, deprived Shelton of two crucial votes that would have sealed her confirmation.

While Shelton seemed to have the necessary support to win a spot on the Fed board when the week started, she now has two exceedingly narrow paths to confirmation — one of which depends on unlikely bipartisanship and the other on unprecedented presidential action.

“Shelton’s nomination isn’t dead quite yet, but it’s running out of time,” wrote Ian Katz, a director at Washington, D.C., research firm Capital Alpha Partners, in a Tuesday research note.

Shelton’s odds for Senate confirmation have bounced between nearly impossible to almost inevitable in the 11 months since Trump nominated her to a seat on the Fed board. 

A former Trump 2016 campaign adviser, Shelton has drawn intense backlash from economists and Fed experts across the ideological spectrum over her unorthodox and inconsistent economic views. Democrats have been universal in their opposition to Shelton, and her inability to soothe the concerns of Republicans during her February confirmation hearing seemed likely to derail her nomination.

Shelton, however, was able to win over several Republican skeptics and seemed to clinch confirmation when Sen. Lisa Murkowski (R-Alaska), who helped sink two previous Trump Fed nominees, announced on Nov. 12 she would support her nomination. 

Even so, Murkowski’s support was obviated by Grassley and Scott’s exposure to COVID-19, preventing Shelton from pulling off the comeback. She went on to lose the procedural vote by a tally of 47 to 50, including Senate Majority Leader Mitch McConnell (R-Ky.) switching his vote to a “no” so he can call another vote on the nomination under Senate rules.

That setback has left Shelton with few ways to land on the Fed board and Republicans with a dwindling chance of taking a potential Fed appointment away from President-elect Joe Biden.

“It’s possible and I think many Republicans would like to take that seat away from Biden, so if they can get her confirmed they would like to, even if it’s really late in the game,” Katz said in an email. 

Republicans currently control the Senate with a 52 to 48 majority, so four Republican defectors would sink her nomination. GOP Sens. Mitt Romney (Utah), Susan Collins (Maine) and retiring Lamar Alexander (Tenn.) already oppose Shelton’s nomination, making one more Republican objection fatal to her bid.

The Senate is on recess until Nov. 30 — the same day Arizona is set to certify election results that will allow Sen.-elect Mark Kelly (D) to be sworn in and immediately replace GOP Sen. Martha McSally. That would make the current number of Republican objectors enough to block Shelton’s confirmation if Kelly voted with every other Democrat.

Shelton’s only hope of being confirmed in 2020 may be if Grassley and Scott can both recover from COVID-19 in time to hold a vote before Kelly replaces McSally. A spokesman for McConnell did not say when or if the leader would bring up Shelton’s nomination again.

Once Kelly is sworn in, Shelton’s confirmation would depend on Republicans successfully defending at least one of Georgia’s two Senate seats in January runoff elections and Trump renominating her when the new Congress convenes just weeks before he is set to leave office.

If that scenario holds, the GOP would maintain a narrow majority and Alexander’s replacement by Sen.-elect Bill Hagerty (R-Tenn.) would allow Pence to break a tie and confirm Shelton if Romney and Collins are the only nonparty-line votes. 

Carl Tobias, a University of Richmond law professor and expert in presidential appointments, said Shelton’s viability in that scenario depends largely on how far Republican senators are willing to go for a departing president who has sought to overturn the results of an election he lost.

“He’s the lamest of ducks at that point and he’s been so anti-democratic, I think it’s gonna be really hard for him to get much sympathy,” Tobias said. “I suppose it could happen. But it would be very, very rare — if it’s ever been done.”

The White House declined to say whether Trump would reappoint Shelton in the waning days of his presidency and referred to a Tuesday statement expressing confidence she would be confirmed whenever the Senate reconsiders her nomination.

Tags Bill Hagerty Chuck Grassley Donald Trump Federal Reserve Joe Biden Lamar Alexander Lisa Murkowski Mark Kelly Martha McSally Mitch McConnell Mitt Romney Monetary policy Susan Collins

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