The US Senate has blocked the nomination of Judy Shelton for a seat on the Federal Reserve board of governors, in a defeat for President Donald Trump, who had stirred controversy by tapping a fierce critic of the US central bank for the job.
Lawmakers in the upper chamber of Congress stopped her nomination from advancing to a final vote in a 50-47 procedural vote on Tuesday.
The outcome was uncertain until the very end. Ms Shelton’s defeat was ultimately sealed after the Republican majority championing her bid suffered several defections and absences within its ranks, on top of unanimous opposition from Democratic senators, including Kamala Harris, the US vice-president-elect, who was in Washington to cast her vote.
On the Republican side, Susan Collins, the Republican senator from Maine, and Mitt Romney, the Republican senator from Utah, voted against Ms Shelton’s nomination to the Fed. Chuck Grassley of Iowa and Rick Scott of Florida could not attend because they were quarantining after being exposed to the coronavirus.
Lamar Alexander, the senator from Tennessee, also opposed the nomination but did not vote. Mitch McConnell, the Senate majority leader, voted against Ms Shelton for procedural reasons, so that he might still be able to bring up her nomination again.
That was a good result for the country. Especially in a pandemic. Not feeling up to the gold standard these days
Amy Klobuchar, Democratic senator from Minnesota
Ms Shelton’s nomination had been controversial from the start, given her past advocacy for a return to the gold standard and her attacks on the US central bank’s role in setting monetary policy, which placed her far outside the mainstream of US economic policymaking.
Assuming Mr McConnell does not successfully revive her nomination, the vote on Tuesday will deny Mr Trump the opportunity to place a loyalist on the Fed board before he leaves office in January.
Mr Trump has also nominated Christopher Waller, an economist at the Federal Reserve Bank of Saint Louis, to fill a second vacancy on the board of the US central bank. That nomination is far less controversial and could well be confirmed by the end of the year.
If Ms Shelton’s nomination had succeeded, she would have held a seat on the Fed board until 2024. While the ability of a single Fed governor to shape or disrupt policy is limited, she still could have been a thorn in the side of Jay Powell, the Fed chairman, as he tried to set monetary policy and implement the central bank’s regulatory mandate.
“Federal Reserve nominee Shelton just went down. That was a good result for the country. Especially in a pandemic. Not feeling up to the gold standard these days,” Amy Klobuchar, the Democratic senator from Minnesota, tweeted just after the vote.
Mr Trump has had a dismal record in trying to fill nominations at the Fed. Stephen Moore, Nellie Liang, the late Herman Cain and the late Marvin Goodfriend were all tapped by the president to be governors at the US central bank but never made it to the finish line.
Assuming Mr Waller is confirmed, Mr Biden would have the chance to fill at least one vacancy on the Fed board with his own nominee once he takes office.
Mr McConnell could still theoretically bring up Ms Shelton’s nomination again before the end of the year, but the math will become even more difficult for Republicans. Mark Kelly, a Democrat, will replace Martha McSally, a Republican, in one of Arizona’s Senate seats at the end of November.