Here’s the latest outrage from “The World’s Greatest Deliberative Body”:
Republican Senator David Vitter has demanded that the Senate hold a debate before any vote on the nominees, which would require Democratic leaders to muster a super majority to move forward – a hurdle that may be too high to clear.
As a result, the Senate may end up abandoning the nominees, Harvard economist Jeremy Stein and investment banker Jerome Powell, and leave a decision on filling out the normally seven-member Fed board until after this year’s presidential election.
“I refuse to provide Chairman Bernanke with two more rubber stamps who approve of the Fed’s activist policies,” Vitter said when asked if he planned to lift his hold on the nominations.
. . .
Democrats control 53 votes in the 100-member chamber, but under Senate rules, they would need to muster 60 votes just to bring the nominees up for a vote, given Vitter’s opposition.
The various votes and debate could take as long as two weeks. But with highway funding, government spending and cyber security legislation looming, Senate Democratic leaders are not likely to make the Fed nominees a priority.
In addition, Democrats would be loath to spend precious political capital defending an unpopular central bank in an election year. Senate Majority Leader Harry Reid will be thinking long and hard before calling on any Democrat in a tight race to support a controversial cause.
“We are still trying to find a way to get Senator Vitter to drop his obstruction,” said Reid spokesman Adam Jentleson.
Matt O’Brien points out what President Obama should do (and what President Roosevelt would have done.):
I’ve left out a fairly important detail. There are two unfilled seats on the FOMC. President Obama’s picks for those positions have been among the victims of the endless Republican obstruction in the world’s greatest deliberative body. There’s a simple solution. Obama could just bypass the Senate with recess appointments. That’s what he did for the Consumer Financial Protection Bureau (CFPB) and National Labor Relations Board (NLRB). Why not do the same for the Federal Reserve (or the Federal Housing Finance Agency)?
There’s no good reason not to. The administration’s rationale is that Republican obstruction over the CFPB and NLRB was particularly pernicious — that it amounted to de facto nullification. Hence, the extraordinary recess appointments for just those vacancies. But even if that’s true, who cares? It’s hard to run the government if it’s not staffed. So staff it! More importantly, there’s little Obama can do that might help the economy more than sending Bernanke a few more friendly faces on the FOMC.
Regrettably, the Obama administration has consistently underestimated the importance of the Fed. That there are still two empty FOMC seats proves as much. So do the administration’s (blocked) nominees. Consider Peter Diamond. He’s a phenomenal economist — a Nobel-prize winner — who’s clearly qualified to serve on the FOMC. But he’s said that he doesn’t think there’s much more the Fed can do now. Even if he’s right — and I clearly don’t think he is — wouldn’t you rather appoint someone who thinks otherwise and find out if the Fed really is powerless? Someone like … former Council of Economic Advisers Chair Christina Romer.
Let’s try pushing some more before we declare that we’re pushing on a string.
Isn’t it ironic that Vitter is a product of America’s most corrupt state? Imagine if Greece had a veto over everything the EU wanted to do. That’s the US Senate circa 2012.