Judy Shelton had advocated a return to the ‘gold standard’ and criticised the Fed’s independence in monetary policy
The United States Senate blocked President Donald Trump’s controversial nomination of Judy Shelton to the board of the US Federal Reserve, making her the latest in a string of failed nominees to the central bank.
Trump’s Republican Party has a 53-47 majority in the current Senate, but several Republicans opposed Shelton’s nomination and two were absent due to exposure to COVID-19.
Shelton’s nomination failed 47 to 50 on a key procedural vote, with three Republicans joining Democrats in voting ‘no’.
Senate Majority Leader Mitch McConnell indicated he may move to bring the nomination back to a vote later if Republicans can rally their members.
Democratic leaders had asked Senator Kamala Harris, who as Vice President-elect has been working with President-elect Joe Biden in Wilmington, Delaware, to return to Washington for the vote on Shelton. As vice president beginning on January 20, Harris would be the tie-breaker in any 50-50 Senate vote.
Shelton is a former adviser to Trump’s 2016 presidential campaign who has argued the nation would be better off returning to the gold standard and criticised the Fed’s power over money and financial markets as “quite unhealthy”.
Her views on interest rates have moved in lockstep with Trump’s.
She lambasted easy money before Trump’s presidency, but supported it after he took office, and has expressed scepticism over the Fed’s need to set policy independently from the president and Congress.
During her Senate confirmation process, she called the Fed’s bond-buying and zero rates in the last crisis “extreme”.
Three Republican senators have said they oppose Shelton’s confirmation. They are Senators Lamar Alexander, Mitt Romney and Susan Collins.
Republican senators Rick Scott and Chuck Grassley did not attend the vote because they are in quarantine following potential exposure to the coronavirus that causes COVID-19.
— Sen. Grassley Press (@GrassleyPress) November 17, 2020
Today was the first time in 27 years that Grassley, age 87, has missed a vote, a Senate record.
The White House on Tuesday said it expects the Senate to eventually confirm Shelton.
“President @realDonaldTrump’s nominee to the Federal Reserve is incredibly qualified. The @WhiteHouse fully supports her, and we remain confident that Judy Shelton will be confirmed upon reconsideration,” White House spokesman Judd Deere wrote in a tweet.
Senate Majority Whip John Thune said he still hopes Republicans will have the votes eventually “although there is a little bit of a complicated factor in the Arizona seat”.
Newly elected Democrat Senator Mark Kelly is eligible to take the oath of office as soon as Arizona certifies its election results, which is scheduled for November 30. He will replace Republican Martha McSally in early December, narrowing the Republican majority in the lame-duck session to 52-48.
Other Trump Fed nominees who failed to be confirmed included former Republican presidential candidate Herman Cain, who died during the campaign of COVID-19 after attending a Trump rally.