President Joe Biden’s pick for Federal Reserve vice chair for supervision, Sarah Bloom Raskin, has withdrawn from being his nominee.
Analysts had said on Monday that Biden probably would need to come up with a new Fed nominee after key Democratic Sen. Joe Manchin announced his opposition to Raskin.
Biden issued a statement Tuesday on Raskin’s withdrawal in which he criticized objections to her. The statement didn’t mention Manchin.
“Despite her readiness — and despite having been confirmed by the Senate with broad, bipartisan support twice in the past — Sarah was subject to baseless attacks from industry and conservative interest groups. Unfortunately, Senate Republicans are more focused on amplifying these false claims and protecting special interests than taking important steps toward addressing inflation and lowering costs for the American people,” the president said.
“I urge the Senate Banking Committee to move swiftly to confirm the four eminently qualified nominees for the Board of Governors — Jerome Powell, Lael Brainard, Philip Jefferson, and Lisa Cook — who are still waiting for an up-or-down vote,” Biden added.
Manchin said in a statement on Monday that he’s “unable to support” the nomination of Raskin to serve on the Fed’s board of governors.
“Her previous public statements have failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation’s critical energy
needs,” said the West Virginia lawmaker said in a statement on Monday.
“Given that Republicans appear united in their opposition to her, Manchin’s decision is very likely to doom Raskin’s nomination,” said Ian Katz, managing director at Capital Alpha Partners, in a note on Monday.
Biden is now likely to pick someone who hasn’t signaled opposition to the fossil fuel industry, according to Tobin Marcus, a policy and politics strategist at Evercore ISI.
“Raskin has been criticized for her quite radical proposal early in the pandemic for the Fed to implement its market stabilization policies, including corporate bond-buying, in a way that did not support fossil fuel businesses,” Marcus said in a note.
“We have no reason to doubt that a different progressive-leaning regulator, without idiosyncratic liabilities on energy policy and ethics questions, would be a potentially viable nominee.”
The president probably will replace Raskin “with a similarly tough regulator, rather than offer a markedly more moderate pick in the hopes of bipartisan acceptability,” the Evercore ISI analyst predicted.
Manchin’s view on nominations and other issues is crucial as the Senate is split 50-50, with Democrats in control of the chamber only because Vice President Kamala Harris can cast tiebreaking votes.
The developments with Raskin won’t affect big banks
said Cowen Washington Research Group analyst Jaret Seiberg said in a note on Monday.
“We still expect other Democrats at the Fed to advance the same agenda,” Seiberg wrote.
Raskin wrote a three-page letter to Biden about her withdrawal.
“It was — and is — my considered view that the perils of climate change must be added to the list of serious risks that the Federal Reserve considers as it works to ensure the stability and resiliency of our economy and financial system,” she said in her letter. “This is not a novel or radical position.”
She also wrote that she faced “relentless attacks by special interests, culminating weeks ago in the boycott of a routine Senate Banking Committee vote to advance [Biden’s] Federal Reserve Board nominees.”
Related: Senate Republicans boycott committee vote on Powell and four other Biden Fed picks
Also: Biden unveils three nominees for top Federal Reserve posts
This is an updated version of a story that was first published on March 14, 2022.