WASHINGTON — A Senate committee on Thursday approved President Barack Obama’s two nominations to fill vacancies on the Federal Reserve’s board. But prospects for a quick confirmation in the full Senate are uncertain.
On a voice vote, the Senate Banking Committee backed the nominations of Jeremy Stein, a Harvard economics professor, and Jerome Powell, an investment banker who served in the George H.W. Bush administration.
Obama had nominated Stein, a Democrat, and Powell, a Republican, in hopes that pairing nominees from both parties could overcome Republican objections. The Fed board hasn’t operated with a full seven members since 2006.
But one Republican senator, David Vitter of Louisiana, a critic of the Fed’s policies under Chairman Ben Bernanke, has expressed opposition. That won’t necessarily block the nominees’ confirmation. But it means the Senate won’t vote before its two-week break starts this weekend.
Vitter, R-La., has criticized the Fed’s efforts to keep interest rates at record lows to encourage borrowing and strengthen the economy. He and other opponents argue that the Fed’s actions have raised the risk of high inflation once the economy strengthens. Vitter announced this week that he would oppose the two nominations.
“I refuse to provide Chairman Bernanke with two more rubber stamps who approve of the Fed’s activist policies,” he said in a statement.
Bernanke has argued that the Fed’s actions have been necessary to support an economy that’s still growing only modestly and grappling with historically high unemployment.
Vitter said he would block any effort to advance the nominations in an accelerated process that can occur only if every senator agrees. The Senate will take up the nominations after it returns from its break in mid-April.
The Senate committee approved three other nominations Thursday: Jeremiah Norton, as a member of the board of the Federal Deposit Insurance Corp.; Richard Berner, to head the new Office of Financial Research at the Treasury Department; and Christy Romero as special inspector general for the Troubled Asset Relief Program, the government’s financial rescue effort.
The committee chairman, Tim Johnson, said he hoped all five nominees would win quick Senate approval.
“They are qualified, they have the support of members in both parties and there is no good reason to block their confirmation,” Johnson, D-S.D., said in a statement.
It isn’t clear how many Senate Republicans will oppose Obama’s two Fed nominees after the congressional break.
As a professor, Stein has specialized in financial regulatory issues. Powell, a visiting scholar at the Washington-based Bipartisan Policy Center, was Treasury undersecretary of finance for President George H.W. Bush.
The Fed’s seven-member Fed board had to address the 2008 financial crisis with just five members. An earlier Obama nominee for a Fed board seat, Peter Diamond, a Nobel Prize winner, asked the White House to withdraw his nomination last year after Republicans had blocked it for a year.
Some Republicans are also considering blocking the Fed nominations to protest Obama’s move on Jan. 4 to make a recess appointment of Richard Cordray, a former Ohio attorney general, to be the first director of the Consumer Financial Protection Bureau.
Republican lawmakers also objected to Obama’s recess appointments that day of two Democrats and one Republican to the National Labor Relations Board.
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