Shelton Running Out of Time to Get Confirmed to Fed Seat
(Bloomberg) -- Judy Shelton is running out of time to win confirmation to the Federal Reserve Board, as Senate Majority Leader Mitch McConnell faces voting obstacles thrown up by the pandemic and the political calendar.
McConnell failed in a procedural vote Tuesday to advance President Donald Trump’s controversial nominee, after two GOP senators were forced into quarantine by Covid-19 exposure. That left the leader short of a majority, thanks to unified Democratic opposition and dissent from two Republicans and the absence of a third who declined to back Shelton.
Now it will depend on whether Florida Republican Senator Rick Scott is able to leave quarantine this week after exposure over the weekend to someone who tested positive for Covid-19, and whether any other senators are forced to stay away from the Capitol by the virus.
“We’re still consulting with his doctor on quarantine,” Chris Hartline, Scott’s communications director, said Tuesday. “But he’s taken a couple tests since Saturday and all negative.”
At stake is Trump’s move to install an ally on the seven-person board before he leaves office, after having appointed three of the current five members and having elevated Jerome Powell to the chair.
Shelton was nominated 17 months ago, but she was stalled moving through the Senate over concerns about some of her past out-of-the-mainstream positions on monetary policy and the role of the Fed. But with the election over, McConnell moved last week to line up votes to get her confirmed on Tuesday.
Florida’s Scott could provide the vote that would bring the Senate tally to 49-49 to move Shelton toward confirmation, with Vice President Mike Pence providing the tie breaker. Senator Lamar Alexander, a Tennessee Republican, announced he opposes Shelton’s nomination but didn’t vote on Tuesday and will be away from Washington this week on family matters, according to a spokesman.
GOP Senator Chuck Grassley also is in quarantine and revealed Tuesday night that he tested positive for Covid-19, likely keeping him away from the Capitol this week. He delivered remarks on the Senate floor Monday without a mask and attended a meeting of Senate GOP leadership in McConnell’s office Monday evening, potentially exposing other senators.
Republican Senators Mitt Romney of Utah and Susan Collins of Maine joined with 45 Democrats and two independents in a 50-47 vote against advancing Shelton’s nomination. Vice President-elect Kamala Harris traveled from Delaware, where she was working with the Biden transition team, to Washington to cast her vote.
McConnell ended up switching his vote to no, a tactical move that would let him bring the nomination up for reconsideration.
But the calendar is tight and the vote count doesn’t get easier for Republicans. The Senate is expected to leave Thursday for the Thanksgiving break. They aren’t scheduled to return until Nov. 30.
That also is the date that Arizona is scheduled to certify results of the election. Republicans would have to muster another vote before Arizona Democrat Mark Kelly is sworn in to replace Republican Martha McSally, who he defeated in a special election. That could be done quickly. Once Kelly takes office, the GOP would be a vote short.
John Thune, the second-ranking Republican senator, said Kelly’s swearing-in will be “a complicating factor here.” After the vote, Thune said “in all likelihood” Senate Republicans will try to vote on Shelton’s nomination again this week.
Senate Banking Chairman Mike Crapo said GOP leadership is waiting to determine whether Scott and Grassley can attend votes.
“It all depends on the quarantines,” he said, adding that he doubted to chamber would stay in session over the scheduled holiday break.
White House spokesman Judd Deere said the administration continues to support Shelton and remains confident she “will be confirmed upon reconsideration.”
Another GOP senator, Pat Roberts of Kansas, said he was undecided on Shelton just hours before the vote got under way. As the roll was being called, he was vigorously lobbied by GOP colleagues on the Senate floor. Roberts ultimately voted with his party to close off debate to move toward the confirmation vote.
While a single board member is unlikely to sway monetary policy decisions, Shelton’s confirmation would slow any effort by Joe Biden to tap candidates “more consistent with his policy views” on financial and banking regulation, said Bill Dudley, a former president of the Federal Reserve Bank of New York.
Shelton, 66, a former informal adviser to Trump, was long known for her advocacy of a return to the gold standard, ultra-hawkish views on inflation and opposition to federal deposit insurance. She provoked further controversy and opposition by abandoning those views and calling for interest-rate cuts to align herself with Trump as she emerged as a candidate for a Fed post.
She has also questioned the relevance of the Fed’s mandate, set by Congress, to pursue maximum employment and price stability.
Former Fed officials and a group of prominent economists, including seven Nobel Prize winners, signed letters this year urging senators to reject her nomination.
©2020 Bloomberg L.P.