Sarah Bloom Raskin, President Joe Biden’s pick for a top Federal Reserve role, has been heralded on the Left as a climate crusader— a reputation that will complicate her confirmation prospects.
The major focus of GOP arguments against Raskin will feature her view that climate change is a systemic risk to the U.S. financial system and that the Fed should play a role in mitigating that risk.
The nature of her positions, and the power the role has, will also come under Republican magnifying glasses.
“Sarah Bloom Raskin has specifically called for the Fed to pressure banks to choke off credit to traditional energy companies and to exclude those employers from any Fed emergency lending facilities,” said Sen. Pat Toomey, ranking member of the Banking Committee.
“I have serious concerns that, if nominated, she would abuse the Fed’s narrow statutory mandates on monetary policy to have the central bank actively engaged in capital allocation. Such actions not only threaten both the Fed’s independence and effectiveness but would also weaken economic growth.”
Raskin’s writings show she thinks the Fed should take a more pronounced role in climate change.
In an article published last September, she suggested financial regulators must “reimagine their own role so that they can play their part in the broader reimaging of the economy.”
“Climate change threatens financial stability; addressing it can create economic opportunity and more jobs,” she wrote in a New York Times op-ed in 2020. “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.”
After the start of the pandemic in 2022, she said climate change is happening and that “whether or not you believe in it, it’s the Fed’s job to be mitigating the impact of exogenous shock.”
Raskin, the wife of Democratic Rep. Jamie Raskin of Maryland, is no newcomer to the central bank’s leadership. She previously served as a governor at the Fed from 2010-14 before she was chosen by President Barack Obama to serve as deputy secretary of the Treasury Department.
Raskin’s first nomination to the Fed was far less contentious than the confirmation process will be this time around.
In 2010, she and current Treasury Secretary Janet Yellen, who went on to lead the central bank, were confirmed unanimously by the Senate.
This time around, it is more likely that every Democrat in the Senate will have to band together to get Raskin approved to the board.
Toomey and some committee Republicans have argued the Fed is at risk of exceeding the dual mandate given by Congress, which is maximizing employment and price stability.
They have expressed concerns the central bank has started to wade into politically loaded issues, such as racial equity and climate change, which they contend do not directly align with the dual mandate.
The Fed’s involvement in climate change was discussed during last week’s hearings for Fed Chairman Jerome Powell’s renomination and Lael Brainard’s nomination for vice chairwoman of the central bank.
Both nominees took a tempered approach to the matter and said that while climate “scenario analysis” of large banks may be appropriate, lending restrictions for those banks should not be in order.
Brainard said she is not an advocate for the Fed trying to influence what sectors banks lend money to, although she said there are risks posed to the financial system by climate change and that banks should heed those hazards.
During the hearing, Toomey invoked Raskin’s name to compare and contrast her with Brainard’s views. He noted Raskin’s remarks about the Fed’s COVID-19 emergency lending facilities.
“She has been explicit on this point, and she has argued regarding the implementation of the CARES act that the Fed, and I quote, ‘Should not be directing money to further entrench the carbon economy.’ So she has explicitly advocated that the Fed allocate capital by denying it to this disfavored sector,” Toomey said, asking Brainard whether she disagreed with Raskin.
She said that while she is unfamiliar with Raskin’s positions, she doesn’t support climate stress tests.
A senior Republican Senate aide predicted to the Washington Examiner that Raskin’s nomination would be a tough lift for Democrats.
The aide referred to Raskin as a “climate alarmist who predicts the end of days for the American financial system if the Fed doesn’t become the next [Environmental Protection Agency].”
The source also predicted Raskin’s past policy positions and remarks may come back to bite her, raising questions about whether Sen. Joe Manchin, a centrist Democrat from West Virginia, might vote against her — a prospect that could tank Raskin’s nomination.
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Not at al surprised since all liberal Democrats chose those types who meet their own narrow minded globalists agrnda
She is right about ‘climate change’?? what wAS iT like when I was lad in the 1930’s?
a young in person in the 1950’s?? Married to Bernadette in 1956, my working life from in 1948 till 1989……….our retirement years…1989….2022, not out!! /get a life lady, enjoy if you can….We are all ‘doomed because OF Climate Change!!! FROM Trevor in New Zealand.