Political News

Controversial Federal Reserve pick Judy Shelton faces uphill confirmation battle

Posted February 13, 2020 12:08 a.m. EST

— Another once of President Donald Trump's Federal Reserve nominees -- gold standard enthusiast Judy Shelton -- may be facing an uphill fight to win Senate confirmation, with key Republicans staying quiet about their voting intentions ahead of her committee hearing Thursday.

Three Republicans -- Sens. Richard Shelby of Alabama, John Kennedy of Louisiana and Pat Toomey of Pennsylvania -- have not said publicly whether they will vote in favor of Shelton, an economic adviser for the 2016 Trump campaign who was nominated by the President for a seat on the Federal Reserve Board last July.

"I met with her yesterday and I haven't committed to anybody," Shelby told CNN. "I'd like to support the nominees the President has nominated. But I'll be at the hearing tomorrow and I told her that and told her to be prepared."

Shelton is set to appear alongside fellow Fed nominee Christopher Waller, who currently serves as the executive vice president and director of research at the Federal Reserve Bank of St. Louis.

Kennedy, who hasn't decided how he will vote on Shelton, told CNN he spent "a couple of hours last night reading some of her writings and probably will read some more tonight. Many of us have questions."

Toomey's office could not be reached for comment.

Republicans have only a one-seat advantage on the Banking, Housing and Urban Affairs Committee. If any GOP senator votes against Shelton's nomination, it would result in a tie and most likely Shelton wouldn't advance out of the committee -- an embarrassing defeat for the White House after Trump's previous pick, outside adviser Stephen Moore, withdrew last year amid Senate opposition.

The White House declined to comment.

Sen. Mike Crapo, the Idaho Republican leading the Senate panel, who supports Shelton, declined to comment on her prospects.

"I'm not going to speculate about what the odds are of anybody's nomination," Crapo told CNN. "We're working it through now and identifying whether there are legitimate concerns."

Trump selected Shelton and Waller last summer after he failed to advance two picks last year: Moore and former Republican presidential candidate Herman Cain, who withdrew from consideration, citing concerns about taking a pay cut. Cain was also shadowed by the revival of sexual harassment allegations that had ended his 2012 campaign, while Moore drew Senate opposition following CNN KFile reports concerning his earlier writings appearing to disparage women, which he dismissed at the time as "a spoof."

Shelton has long advocated for returning to the gold standard, which the United States abandoned in 1971. She's argued that the policy would make the dollar less susceptible to inflation or other volatility -- a view the majority of US economists believe would be disastrous for the US economy.

She has also advocated interest rate cuts, echoing the President's criticism of his Fed chairman, Jerome Powell, and has openly questioned the effectiveness of the members of the Fed's interest rate policy-setting committee.

Sen. Sherrod Brown of Ohio, the ranking Democrat on the committee, said Shelton's changing positions have created the appearance of her willingness "to do Trump's bidding on the Federal Reserve, and that's not how the Fed works."

Shelton appeared to be directly speaking to her critics in testimony released by the committee on Wednesday in advance of the hearing.

"Our central bank has been entrusted with considerable power to carry out its responsibilities," she wrote in her prepared remarks. "Along with the political independence and operational autonomy granted to the Federal Reserve comes an obligation to be wholly accountable both to Congress and to the public."

Trump has moved to reshape the world's most powerful central bank during his three years in office. If Shelton and Waller are confirmed by the Senate, he will have appointed six out of the seven of its current board members.

Trump has repeatedly criticized Powell, his handpicked Fed chairman, for not cutting interest rates deeper to help boost the economy, now on record as one of the longest economic expansions.

Trump said in an interview with Fox Business on Monday that his chairman "let me down." He added: "We should have a lower interest rate. I think he's done the wrong thing."

Our commenting policy has changed. If you would like to comment, please share on social media using the icons below and comment there.