Senate Banking Committee Ranking Member Pat Toomey clashed with one of President Biden's Federal Reserve nominees at a Thursday hearing, insinuating that she would abuse the Fed's power to direct money away from the fossil fuel industry.
Toomey, R-Pa., also lambasted another nominee for alleged "extreme left-wing political advocacy," as the nominees pushed back and Democrats said GOP attacks require "a suspension of common sense."
"She’s repeatedly, publicly, and forcefully advocated for using financial regulation—including the Fed—to allocate capital and de-bank energy companies," Toomey said of Biden nominee Sarah Bloom Raskin in his opening statement.
Raskin is up for a job as the vice president for supervision at the Fed. Toomey cited numerous podcasts, speaking appearances and articles Raskin wrote in which she advocated for such climate policies.
Raskin pushed back on Toomey's comments. Under questioning from Banking Committee Chairman Sherrod Brown, D-Ohio, Raskin said she would remain apolitical in her role and defended her record as a regulator.
"Regulatory actions must always stay within the bounds of the law. They must stay within the bounds of the Fed's authority as Congress has set forth," she said. "I understand Congress' strictures and authorities and have always acted within them… I have never deviated from these… principles."
Raskin said her role as the vice chair for supervision wouldn't allow her to pursue the kinds of policies Toomey is warning about.
"Banks choose their borrowers," Raskin said. "The Fed does not."
Toomey was not convinced.
"I hear you say this. But the problem is the huge document documented weight where you have said something very, very different," Toomey said. "There is no reasonable reading of these articles and speeches that can come to a conclusion other than that you want to be allocating capital away from those industries that are generating large amounts of CO2."
Toomey also accused Michigan State economics professor Lisa Cook of liberal bias in his opening statement at the hearing. She's nominated to join the Fed's board of governors,
"It's also important to note Professor Cook’s extreme left-wing political advocacy," Toomey said."She has publicly supported race-based reparations, promoted conspiracies about Georgia voter laws, and sought to cancel those who disagree with her views."
But Cook in her opening statement highlighted that she's served in both Democratic and Republican administrations.
"[W]hen I make decisions, I do so based on the facts and not politics," Cook said.
Democrats on the committee, meanwhile, defended Cook's and Raskin's qualifications while highlighting their diverse backgrounds. Brown hit back on criticism of Raskin, saying that she was confirmed unanimously by the Senate twice before.
"Regrettably, we've seen a coordinated effort by some to paint her as some sort of radical. That characterization requites a suspension of common sense," Brown said.
"Professor Bloom Raskin, I really appreciated our conversation and your commitment to the value of community banks and small banks," Sen. Tina Smith, D-Min., said. "And I must say, you have been absolutely clear, both in public and in our private conversations that you emphatically believe that the Fed has no role in picking winners and losers in our economy, including in the oil and gas sector."
Sen. Elizabeth Warren, D-Mass., meanwhile, cited used comments by Fed Chairman Jerome Powell to defend Raskin's climate change stance.
"Sen. Ossoff asked Chair Powell last year whether climate change had implications for the Fed's dual mandate and its responsibility for financial stability," Warren said. "Chair Powell said, and I want to quote here, ‘I think it has implications for all of those things… because we know that the transition to a lower-carbon economy may lead to a sudden repricing of assets... and we need to think about that carefully in advance."
"I don't support Chair Powell's nomination for another term running the Fed. But even he thinks that it is just common sense that the Fed should work to mitigate the risk of significant economic loss triggered by climate change," Warren said.
Raskin also clashed with Sen. John Kennedy, R-La., who cited a 2020 New York Times op-ed in which she questioned why the government would give emergency COVID-19 loans to oil and gas companies. Raskin called fossil fuels a "dying industry" and said they would be too risky an investment for taxpayers.
"You said, don't give the money to oil and gas. Let them go broke. Because in my opinion they're bad for the environment," Kennedy said, loosely paraphrasing the op-ed.
"It was written in a context, senator, that had to do with emergency lending. It did not have to do with the context of supervision," Raskin responded – drawing a distinction between the Fed's role and the distribution of emergency virus cash.
"You said it, you ought to own it," Kennedy responded. "You said it, you ought to own what you said. I'd respect you more if you did."