Senate confirms 2 Federal Reserve board nominees

AP News
Posted: May 17, 2012 5:13 PM
Senate confirms 2 Federal Reserve board nominees

The Senate has confirmed President Barack Obama's two nominees to the Federal Reserve Board, bringing the seven-member board to full strength for the first time since April 2006.

Harvard economics professor Jeremy Stein, a Democrat, was confirmed Thursday on a 70-24 vote. Former private equity executive Jerome Powell, a Republican, was confirmed, 74-21.

Obama had nominated the two in December, hoping that the pairing a Democrat and a Republican would quickly win the blessing of the Senate.

But Sen. David Vitter, R-La., who opposed Stein and Powell, had blocked their confirmations. Vitter said the pair would essentially serve as a rubber stamp for Fed Chairman Ben Bernanke's policies.

Vitter forced the Senate to go through a parliamentary procedure that required the nominees get at least 60 votes.

"I couldn't vote for the two nominees because they clearly support the current unprecedented activist monetary policies of the Fed," Vitter said during the Senate debate.

Vitter said that he agreed with economists who believe that the Fed's policy of keeping a key interest rate at a record low near zero since December 2008 is "a very dangerous policy" that runs the risk of igniting inflation problems in the future.

Bernanke has argued that the Fed's actions have been necessary to support an economy that is struggling with high unemployment.

Stein has served as a senior adviser at Treasury in the Obama administration and as an economist in President George H.W. Bush's administration. He has spent the bulk of his career teaching at Massachusetts Institute of Technology and Harvard, where he has specialized in financial regulatory issues.

Powell was Treasury undersecretary of finance for President George H.W. Bush. He has also worked at investment bank Dillon Read & Co. and the Carlyle Group, a private equity firm.

Powell will fill the term vacated by Frederic Mishkin, which is set to expire in 2014. Stein was nominated to fill the term of Kevin Warsh. That term is set to expire in 2018. A full Fed term runs for 14 years.