Sarah Bloom Raskin, President Biden’s nominee to become the Federal Reserve's top Wall Street regulator, is expected to face difficult questions from Senate Republicans on Thursday over concerns that her "extreme" stances on issues like climate change could endanger the central bank's independence.
Raskin, who was formally nominated last month by Biden to serve as the Federal Reserve's vice chairwoman for supervision, is expected to be grilled on Thursday during her testimony before the Senate Banking Committee. She will be joined by two academic economists – Lisa Cook and Philip Jefferson – who have been tapped to join the central bank's seven-person board.
GOP lawmakers previewed their biggest concerns in a Wednesday report that highlights some of Raskin's more controversial statements on challenges that climate change poses to the current financial system – and how she believes the Fed needs to respond.
Raskin has previously argued that all financial institutions should re-evaluate their relationships with energy companies and has advocated for a push toward sustainable investments that do not depend on carbon and fossil fuels. If banks and other financial institutions do not take these steps to distance themselves from fossil-fuel companies, Raskin has said the Fed should penalize them.
"Raskin’s extreme positions are based on her misguided belief that global warming will create financial risks that ‘will bring about economic catastrophe’ and ‘flatten an economy and grind it to dust,' as she wrote in a June 2020 report," the Republicans wrote in their brief.
The Republican lawmakers on the Senate Banking Committee contrasted Raskin's statements to those of Fed Chairman Jerome Powell, who has largely steered clear of advocating for more governmental action on climate change. (Powell is a Republican and was first nominated in 2017 by then-President Donald Trump).
As vice chair for supervision, Raskin – a Duke University law professor who has held high-level jobs at both the Treasury Department and the Fed – would oversee annual stress tests that review bank safety and liquidity. Her nomination has been welcomed by progressive senators and advocacy groups, who think she will take a tougher stance against Wall Street than her predecessor, Randal Quarles, a Trump nominee who stepped down last month.
Raskin served on the Fed's board from 2010 to 2014 and was tapped by former President Barack Obama to serve as assistant Treasury secretary.
Although Republicans are already gearing up to fight Raskin's nomination as the Fed's top regulatory czar, she is expected to be confirmed by the full Senate, which could vote as soon as this month.
The White House has defended the nomination, with press secretary Jen Psaki telling reporters on Monday that Raskin brings "unprecedented experience and the support of economic experts across the spectrum" to this role.
"She believes, and she has said she believes firmly in the independent role of the Federal Reserve and will work in concert with her colleagues to identify and mitigate a range of risks," Psaki said.
Cook could face questions on her history of liberal activism, including her support for reparations for Black Americans for slavery and racial discrimination. She said in 2020 she supported "bail funds" that were active during the summer 2020 riots – the same kind of groups that Vice President Kamala Harris was criticized for backing in 2020. Cook also advocated for people to donate to Stacey Abrams' Fair Fight political group at the same speaking engagement.
Late last year, Biden nominated Powell to a second four-year term at the helm of the central bank and picked current Fed Governor Lael Brainard as the Fed's second in command.
FOX Business' Tyler Olson contributed to this report.