House Republicans lambast Biden over Fed nominee Sarah Bloom Raskin: A 'far-left radical'
Sarah Bloom Raskin could 'irreparably politicize' the Federal Reserve, Republicans warn
EXCLUSIVE: A coalition of House Republicans is sounding the alarm over Sarah Bloom Raskin, President Biden’s nominee to become the Federal Reserve's top banking regulator, expressing concern that her climate regulation views could endanger the independence of the U.S. central bank and hurt working-class Americans.
In a Wednesday letter addressed to the White House, 48 GOP lawmakers urged President Biden to reconsider his nomination of Raskin as the Fed's vice chair of supervision, warning that her past statements indicate she would "irreparably politicize the Federal Reserve and destroy what remains of its credibility and independence."
SARAH BLOOM RASKIN OPPOSED BY 24 STATE FINANCIAL OFFICERS OVER 'RADICAL' VIEW
"We are deeply troubled by your decision to nominate Ms. Raskin, who would wield tremendous regulatory and supervisory authority that could be weaponized to discourage or prohibit banks from lending to or investing in American energy," the letter, a copy of which was first shared with FOX Business, said. "Her consistent advocacy for the Federal Reserve to de-bank energy companies raises the troubling prospect that she would do just that."
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.
But Republicans warned that targeting the oil and gas industry could have irreparable side effects on working-class families – particularly those who live in energy-producing states like Pennsylvania and West Virginia.
Rep. Guy Reschenthaler, R-Pa., spearheaded the Wednesday letter to Biden, and told FOX Business during an interview that he had three problems with Raskin: Her previously stated belief that the Fed can "pick winners and losers in the economy," her suggestion that the Fed is in a "unique position to effectuate climate change" because the institution operates independently and outside the purview of Congress, and her past criticisms of the energy sector and push to bar the industry from benefiting from coronavirus relief money.
"For all those reasons, she is way too radical," Reschenthaler said. "She’s way too out of step with the role of the Fed. And she has a warped view of American democracy in that she wants to put more power in those that are unaccountable to the electorate."
Raskin has also drawn scrutiny over a May 2020 New York Times op-ed that she authored titled "Why Is the Fed Spending So Much Money on a Dying Industry?" In the op-ed, Raskin criticized the federal government for including the oil and gas industries in the initial $2.2 trillion coronavirus relief package and said the Fed should adopt a long-term approach that shifted away from fossil fuels.
"Given the size and scope of government intervention, we should be maximizing the public’s return on our investment," she wrote at the time. "The Fed’s unique independence affords it a powerful role, and its mandate includes ensuring both the stability of the financial system and full employment. Climate change threatens financial stability; addressing it can create economic opportunity and more jobs."
Raskin later said she made the comments in the context of taxpayer-funded spending and would not apply it to the role of the Fed.
Republicans on the Senate Banking Committee skewered Raskin during her confirmation hearing last week over some of her more controversial statements on challenges that climate change poses to the current financial system – and how she believes the Fed needs to respond. Raskin maintained that she believed it is "inappropriate" for the Fed to make credit decisions and allocations based on "choosing winners and losers."
"Banks choose their borrowers. The Fed does not," she told the Senate Banking Committee. "It is inappropriate for the Fed to choose winners and losers, and to do so is not the proper institutional role of the Fed. That is a cardinal principle of Fed supervision."
Given the 50-50 Senate, Democrats would need to secure the support of every member of their caucus to overcome unified Republican opposition. The House does not vote on presidential nominees – which Reschenthaler acknowledged.
"Ultimately this is a decision for the senate," he said. "But any senator that is thinking about confirming this far-left radical, that goes through, they’re going to have to answer to their voter. There will be a price to pay."
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 in December.
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.
The White House has defended the nomination, with press secretary Jen Psaki telling reporters in late January that Raskin brings "unprecedented experience and the support of economic experts across the spectrum" to this role.
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"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.