Two Dem Senators Oppose Powell for "Fed" chair because of climate change? Seriously...joke right?
First I'm in favor of climate change. I support China and India because the world's largest polluters soon to dwarf the US. Honestly, driving my Prius and having the Fed do a better job tweaking interest rates is the answer. If you think the Fed's job is to help manage inflation or avoid a stock market crash you are a selfish climate denier. Shame...shame on you.
Two Democrats Oppose Powell for Fed Chair, Citing Climate Change
Progressive Democrats have split over potential reappointment of Jerome Powell; Biden set to announce pick soon
Federal Reserve Chairman Jerome Powell was confirmed to his post in 2018 with 84 votes in favor.
By Nick Timiraos, WSJ
Updated Nov. 19, 2021 12:04 pm ET
Two liberal Democratic senators said Friday they would oppose a second term for Federal Reserve Chairman Jerome Powell because they want the central bank to play a more aggressive role addressing climate change.
Sens. Jeff Merkley (D., Ore.) and Sheldon Whitehouse (D., R.I.) issued a statement calling on President Biden to appoint a Fed chair “who will ensure the Fed…shares the administration’s view that fighting climate change is the responsibility of every policy maker. That person is not Jerome Powell.”
Mr. Biden is deciding between reappointing Mr. Powell, a Republican, when his four-year term expires in February, or promoting Fed governor Lael Brainard, a Democrat, who has largely supported Mr. Powell’s approach on interest-rate policy while advocating a tougher regulatory posture.
Three Senate Democrats have publicly opposed a second term for Mr. Powell. The other is Sen. Elizabeth Warren (D., Mass.). None of them have endorsed an alternative candidate. Mr. Powell likely faces a much more comfortable path to gaining 50 Senate votes in any confirmation process because he enjoys support from lawmakers in both parties. Ms. Brainard is more likely to be confirmed on a near party-line vote.
Other Democrats, including Montana Sen. Jon Tester, have opposed calls to replace Mr. Powell because they have said they don’t want to take steps that further politicize the operations of the central bank.
Mr. Biden hinted Tuesday that he could reveal his choice around the end of the week, though a White House official suggested the decision could slip into next week. Advisers are making sure they have enough Senate support for either candidate, according to people familiar with the matter.
Mr. Powell was confirmed to his post in 2018 with 84 votes in favor. Of those senators, 68 are still in office, evenly split between the two party caucuses.
Mr. Powell, 68 years old, is a former private-equity executive who was nominated in 2011 by former President Barack Obama to join the Fed board and tapped four years ago by former President Donald Trump to lead the central bank.
Ms. Brainard, 59, is an economist who joined the Fed in 2014 after working in the Obama Treasury Department and the Clinton White House on international economic issues. Ms. Brainard received 61 votes during her confirmation in 2014, including from four Republicans who are still in the Senate.
Progressive Democrats have grown frustrated this year over the prospects of addressing climate change through the legislative process and have instead turned their focus to regulatory agencies to advance overhauls through the administrative process.
Environmental groups have placed more pressure on the Fed to use its powers overseeing the safety and soundness of the banking system to take steps that range from monitoring banks’ resilience to climate-related weather events to more actively influencing borrowing costs for fossil-fuel-related investments.
Other Democrats have said the push for the Fed to unilaterally tackle climate risks is misguided because it could create political opposition and prompt Congress to curb its autonomy more broadly.
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“It would be great to have a central bank that actively promoted clean energy…but this is not a power that has been given to the Fed by Congress,” said Dean Baker, a co-founder of the liberal Center for Economic and Policy Research. “While it can arguably do this with the power it has, it would be virtually certain to lose this power very quickly if it went this route.”
The Fed this year has built out two committees designed to monitor climate-related risks in the biggest banks and in the financial system as a whole. But Mr. Powell has been sensitive to potential political blowback, given the U.S. political divisions over how or whether to address climate change.
“We do think we have a role in climate change,” Mr. Powell said at a press conference this month. “We expect [financial institutions]…to understand and be in a position to manage their risks,” including physical risks or so-called transition risks, or the costs associated with moving to a lower-carbon economy.
But he pushed back against calls from environmental groups for the Fed to influence the cost of borrowing for certain energy investments. “That’s not a decision for bank regulators or for any agency. That’s a decision for elected representatives,” he said.
Ms. Brainard has detailed ways for the Fed to direct the biggest banks to manage climate-related risks as part of a broader effort to monitor potential hazards to the financial system. “It’s an area where the U.S. has been behind, and we need to catch up,” Ms. Brainard said in October.
Other Fed officials who have been more vocal about the need to monitor climate risks have nevertheless warned recently against asking too much of the central bank.
“I would encourage all of us not to think the Fed is the magic solution to how we’re going to solve climate risk,” said San Francisco Fed President Mary Daly last week. “We are jumping too far forward when we think about the Fed solving all of these problems” because the powers available to the Fed don’t give it the ability to fundamentally address climate risks, she said.