White House mobilizes ‘war room’ to support Fed candidates as attacks mount

WASHINGTON, Feb 2 (Reuters) – After a previous candidate for a top job in US banking regulation was torpedoed, White House officials are determined not to let that happen again and have endorsed President Joe Biden’s nominees for three top positions circled at the Federal Reserve.

The three nominees — former Fed Governor Sarah Bloom Raskin and economists Philip Jefferson of Davidson College in North Carolina and Lisa Cook of Michigan State University — face a Senate Banking Committee hearing on Thursday, but sparks are already flying.

Senate Republicans and other opponents of the nominations – notably Raskin – have unleashed a wave of criticism. They have targeted Raskin’s appointment as vice-chairman for oversight in large part because of her views on climate change.

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But in contrast to the administration’s lukewarm response to a similar attack on Saule Omarova for her appointment as currency controller — a campaign that led to her rescinding her name — the Biden team is now struggling daily to push its candidates into the Fed promote Board of Directors.

“They’re definitely more committed to these nominees,” said a Senate staffer. “This is a historic opportunity to truly transform the Federal Reserve and the White House is taking it seriously.”

The effort, which a White House official said will involve daily online meetings of nearly a dozen officials, was launched to stay current and respond quickly to attacks by Republicans and business interests on the candidates.

They’re also trying to fend off any opposition from Democrats, which ultimately helped unravel Omarova’s nomination.

Biden’s full list of nominees includes Jerome Powell for another term as chairman and Gov. Lael Brainard for vice chairman. Among the three candidates chosen to add diversity to the Fed are two black and two women. If all are confirmed, four of the seven seats on the board would be in the hands of women for the first time, including the first black woman governor.

“As this is a top priority, we have established a War Room in the White House made up of various departments that meet daily to spread positive news about the nominees and the endorsements that continue to be received in support of each of the nominees,” so said a White House official.

The effort, which includes near-daily press releases highlighting support for the candidates, reflects the Federal Reserve’s importance in shaping U.S. economic and monetary policy and the large number of Fed candidates who are immediately confirmed said the officer.

The stakes are high as the Fed prepares to hike interest rates to counter an unexpected surge in inflation and the economy grapples with supply chain deadlocks and labor shortages.

National Urban League president Marc Morial said the White House’s campaign to promote Fed nominees is necessary. Cook’s critics have focused on her status as a black woman and have not given due weight to her credentials, while former President Donald Trump’s nominees have not been scrutinized as rigorously, despite being less qualified, he said.

“She’s more than qualified,” he said. “We cannot ignore the fact that this is the first time in over 100 years that a black woman has been nominated for the Federal Reserve Board of Governors… We have the right to expect that she will be treated fairly.”

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Reporting by Andrea Shaal; Edited by Dan Burns and Cynthia Osterman

Our standards: The Thomson Reuters Trust Principles.


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