Senate Republicans block a key vote on Biden's nominations for the Federal Reserve

Senate Republicans blocked a committee vote Tuesday on five of President Biden's nominees to the Federal Reserve board, delaying their confirmation at a time when the central bank is under growing pressure to crack down on inflation.

The delayed nominations included Jerome Powell for a second term as Fed chairman, Lael Brainard as vice chair and economists Lisa Cook and Philip Jefferson as Fed governors.

The stalling tactic was aimed at a fifth nominee — Sarah Bloom Raskin — who is Biden's pick to be the Fed's top banking regulator. Raskin has drawn opposition from Republicans for arguing that financial regulators should consider the risks posed by climate change.

GOP senators also say they want more answers about Raskin's work with a Colorado fintech company.

By boycotting a meeting of the Senate Banking Committee Tuesday, Republicans prevented the panel from holding a vote, at least for now.

"Instead of showing up to work to do their jobs, Republicans have walked out on the American people," said Sen. Sherrod Brown, D-Ohio, the committee's chairman. "At this pivotal moment in our economy's history, everyone understands we need a full [Federal] Reserve board."

Brown defended Raskin, who won Senate confirmation for a previous term on the Fed board, as well as a top post in the Treasury Department. She is married to Rep. Jamie Raskin, D-Md.

"They can't attack her on substance, she's so qualified, so they've engaged in malicious character assassination and innuendo, without offering real evidence," Brown said.

Raskin faces heat from Republicans

Senate Republicans have questioned whether Raskin improperly used her connections at the Federal Reserve to win access to a central bank master account for Reserve Trust, a fin-tech company where she served on the board of directors.

The master account provides access to the Fed's payments system.

Both Raskin and the Federal Reserve Bank of Kansas City, which granted the company a master account, have denied there was any improper influence.

Sen. Pat Toomey, R-Pa., the top Republican on the Banking Committee, said he and his colleagues were prepared to vote Tuesday on the other four nominees.

"Until basic questions have been adequately addressed, I do not think the Committee should proceed with a vote on Ms. Raskin," Toomey said in a statement.

Toomey also warned that if confirmed to the Fed board, Raskin would "choke off credit" to fossil fuel companies, although Raskin told lawmakers during her confirmation hearing that it's up to banks, not the Federal Reserve, to decide which companies they lend money to.

The delay in the committee's vote leaves three vacant seats on the Fed board. In addition, Powell is serving in a temporary capacity, since his term as chairman expired earlier this month.

Fed policymakers are widely expected to begin raising interest rates in an effort to lower inflation at their next meeting in March. That meeting will proceed, even if the confirmation standoff is not resolved by then.

Inflation is at its highest level in nearly four decades, with consumer prices in January up 7.5% from a year ago.

White House spokeswoman Jen Psaki described the Republicans' move to block the vote as "totally irresponsible."

"It's never been more important to have confirmed leadership at the Fed to help continue our recovery and fight inflation," she said.

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