Biden suffers blow as Federal Reserve nominee withdraws

President Joe Biden’s agenda suffered a setback Tuesday when Sarah Bloom Raskin, his nominee for vice chair of the Federal Reserve, withdrew her nomination.

Raskin was controversial due to her views on whether or not the Federal Reserve should take an activist role in issues regarding the environment. 

“Raskin in 2020 urged the Fed not to offer emergency loans to fossil fuel companies struggling to stay afloat amid the pandemic and criticized investing in oil and gas companies,” The Hill reported.

“She has also urged regulators and banks to pay closer attention to ways climate change can upend the financial system, drawing fierce opposition from the fossil fuel industry.”

The Federal Reserve’s vice chair is oft referred to as the “top cop” for the position’s regulatory role, making her prior positions worrying. Goldman Sachs analysts had noted in February that Raskin’s nomination “would likely signal a hawkish shift on regulatory policy” going beyond just capital requirements and into environment-related enforcement actions.

Raskin had previously been deputy secretary of the Treasury under Obama in addition to serving on the Federal Reserve’s board of governors.

While she had support within the Federal Reserve, Senate Republicans and the energy industry opposed her nomination.

On Monday, three centrist senators — Democrat Joe Manchin of West Virginia and Republicans Susan Collins of Maine and Lisa Murkowski of Alaska — all signaled they would be unwilling to support Raskin.

This meant she effectively had no way forward to being confirmed in a split 50-50 Senate, particularly given there were no other GOP votes to be had.

In a letter to the president first reported on Tuesday by The New Yorker, Raskin said she was withdrawing her nomination because it had been subject to what she called “relentless attacks by special interests.”

“Their point of contention was my frank public discussion of climate change and the economic costs associated with it,” Raskin said. “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.”

In a Tuesday statement acknowledging Raskin’s letter of withdrawal, the president sounded a note of resignation.

“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,” Biden said.

“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.”

It’s worth noting those remarks came on a day where the average price of a gallon of gas remained over $4.30 a gallon nationally, still hovering near record levels.