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Senate Republicans boycott committee vote on Biden's Federal Reserve nominees

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MoneyWatch: What the Federal Reserve's plan to raise interest rates will mean for American consumers 03:55

Senate Republicans are blocking all President Biden's nominees for the Federal Reserve from advancing as they raise questions over his pick to be the top banking regulator. In a statement early Tuesday, ranking member Pat Toomey announced Republicans would not attend the meeting, meaning Democrats would not have the quorum necessary to hold the votes.

The Senate Banking Committee was forced to delay votes Tuesday on advancing the nominations of Jerome Powell to serve a second term as chairman of the Federal Reserve and Lael Brainard as vice chair. The committee was also supposed to move forward with the nominations of Sarah Bloom Raskin as vice chair of supervision and Lisa Cook and Philip Jefferson as members of the Board of Governors. 

Democrats warned the boycott could hurt American workers amid soaring inflation and hamper the recovery from the pandemic. But Republicans skipped the meeting over one specific nominee – President Biden's choice of Raskin as the Fed's top banking regulator, responsible for developing regulatory policy recommendations. 

"Ms. Raskin's repeated and forceful advocacy for having the Federal Reserve allocate capital and choke off credit to disfavored industries is alone disqualifying and reason enough to vote against her. But whether to proceed with a vote today is a separate question," Toomey said. 

Toomey also referenced Republican' questions about her government connections and her role in the private sector, when she served on the board of the financial tech company Reserve Trust.

"Important questions about Ms. Raskin's use of the 'revolving door' remain unanswered largely because of her repeated disingenuousness with the Committee, from her sloppy questionnaire, to an evasive conversation with Committee staff, to her refusal to answer questions from Senator Lummis at her nomination hearing, and her non-answers in written follow-up questions to the hearing," the statement continued. 

Raskin faced a contentious hearing before the Senate Banking Committee earlier this month where Republicans grilled her over her stance on the financial regulators' role in combating climate change as well as her work on behalf of Reserve Trust after serving on the Federal Reserve board. 

Toomey said Republicans are not seeking to delay her vote – but rather for their questions to be "adequately addressed" before moving forward. But on the floor of the Senate Tuesday, Senate Minority Leader Mitch McConnell urged Mr. Biden to find another candidate to serve at the Fed. 

In response to the GOP boycott, Democrats blasted Republicans for blocking the nominees. Banking Committee Chairman Sherrod Brown accused GOP members of walking out on the American people. 

"My Republican colleagues claim that it is because they haven't gotten the information they've requested from one of the nominees. Let me be clear: Ms. Bloom Raskin has been the subject of an unrelenting smear campaign and fear mongering by the Ranking Member and Republicans – something that's become all too common," Brown said. 

He claimed Raskin has answered every single question, and pointed out that she has been confirmed twice before by the Senate. Raskin previously served on the Fed from 2010 to 2014 and as Deputy Treasury Secretary during President Obama's second term. 

"They're not showing up to do their constitutional duty that they were elected to do," said Senator Jon Tester, who pointed out Republicans showed up during the last administration to vote for nominees who he said were not qualified. 

All 12 Democrats during the meeting signaled they would support all of the nominees even as Republicans were absent. Brown dismissed the idea of breaking up the votes to advance Biden's picks for the Central Bank. 

Democrats also blasted Republicans Tuesday, saying if they cared so much about inflation and the impact of rising prices on Americans, they would show up to make sure the Fed has a fully functioning board.

"They're taking away probably the most important tool that we have, and that's the Federal Reserve to combat inflation," Brown said of his Republican colleagues.

Consumer prices are up 7.5% from a year ago, and the central bank is expected to start raising interest rates starting next month. The board has not yet decided how often and by how much the Fed will raise rates. 

There are three empty seats on the Federal Reserve board. Powell and Brainard are serving in their roles in an acting capacity. If Mr. Biden's nominees are confirmed, it would be the first time the Fed has its full seven-member board in a decade.

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