West Virginia Senator Joe Manchin recently announced that he would not vote to confirm Sarah Bloom Raskin to a key Federal Reserve position, effectively putting an end to her nomination. The moderate Democrat cited the Fed’s responsibility to combat inflation and previous statements by Raskin that were critical of fossil fuels as reasons for his opposition to the nomination.
In September, Raskin wrote an opinion piece for Project Syndicate arguing that financial authorities should “reimagine their own role so that they can play their part in the broader reimagining of the economy.” In 2020, she penned an op-ed for the New York Times claiming that “Climate change threatens financial stability; addressing it can create economic opportunity and more jobs. The decisions the Fed makes on our behalf should build toward a stronger economy with more jobs in innovative industries — not prop up and enrich dying ones.”
Since her nomination to be the Fed’s vice-chairperson of supervision, Raskin has been grilled by Republican senators on the Senate Banking Committee. The Republicans argue that Raskin would unlawfully use the Fed to tackle climate change. They also claim she has lobbied the Fed to restrict credit to industries unfavorable to Democrats such as oil and gas. However, Raskin disputed those allegations at her confirmation hearing.
During the hearing, Raskin attempted to ease GOP members’ worries by rejecting the concept that the Fed should select winners and losers. She stated, “It is inappropriate for the Fed to make credit decisions and allocations. Banks choose their borrowers, not the Fed.” Despite this, Manchin, who has worked in the coal sector, was not persuaded by her comments.
Manchin explained:
“Now more than ever, the United States must have policy leaders and economic experts who are focused on the most pressing issues facing the American people and our nation — specifically rising inflation and energy costs. Her previous public statements have failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation’s critical energy needs.”
Raskin has also been accused by Republicans of directly pressuring the Fed to gain access to the central bank’s payment system. They claim that her work with Reserve Trust in Colorado after serving in the Obama administration and holding a previous Fed position raises questions about the “revolving door” between government and private sector jobs. While Raskin denies any misconduct and claims to have no recollection of contacting the central bank regarding Reserve Trust’s master account application, she said she would have followed all applicable ethical guidelines if she had.
