2 More Progressive Senators Oppose Fed’s Powell Serving Another Term

2 More Progressive Senators Oppose Fed's Powell Serving Another Term jerome powell speaks in hearing Federal Reserve Chairman Jerome Powell testifies during a Senate Banking, Housing and Urban Affairs Committee hearing on the CARES Act, at the Hart Senate Office Building on Sept. 28, 2021, in Washington, D.C. (Kevin Dietsch/Getty Images)

By Charlie McCarthy | Friday, 19 November 2021 11:18 AM

Two progressive Democrat senators said Friday they would oppose a second term for Federal Reserve Chairman Jerome Powell because of his inadequate response to the climate crisis.

Sens. Jeff Merkley, D-Ore., and Sheldon Whitehouse, D-R.I., issued a joint statement urging President Joe Biden to nominate someone else due to Powell refusing "to recognize climate change as an urgent and systemic economic threat."

"Climate chaos is an urgent threat to our health, communities and economy. We need a Fed Chair who recognizes the urgent need for bold climate action. That person is not Jerome Powell," Merkley tweeted Friday morning.

Progressives have grown frustrated over the prospects of addressing climate change through the legislative process, The Wall Street Journal reported, and have switched their focus to regulatory agencies to advance overhauls through the administrative process.

Sen. Elizabeth Warren, D-Mass., also has opposed Powell being nominated for another term.

The Associated Press reported that the senators' statement came as Biden is about to announce whether he will offer Powell a second four-year term as Fed chair or instead nominate Lael Brainard, the leading alternative, who is a member of the Fed's board of governors. Powell's term as chair expires in February.

Brainard, a Democrat, largely has supported Powell’s approach on interest-rate policy while advocating a tougher regulatory posture, according to The Wall Street Journal.

The president indicated he could reveal his pick by the end of the week, though a White House official told the Journal the decision could go into next week. Advisers want to make sure there’s enough Senate support for either candidate.

None of the three progressive Democrats against Powell have endorsed an alternative candidate, the Journal said.

Other Democrats, however, expressed support for Powell because they don’t want to further politicize the operations of the central bank. Sen. Jon Tester, D-Mont., is one such senator.

"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," Dean Baker, a co-founder of the liberal Center for Economic and Policy Research, told the Journal. "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."

A former private-equity executive, Powell was chosen by then-President Donald Trump to lead the Fed. He had been nominated in 2011 by then-President Barack Obama to join the central bank board.

Powell, 68, was confirmed in 2018 with 84 senators voting to approve. Of those senators, 68 remain in office, evenly split between the two party caucuses, the Journal reported.

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.

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