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Shelton nomination to the Federal Reserve runs into COVID snag

Brian Cheung
·Reporter
·3 min read
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Former Trump economic adviser Judy Shelton’s bid to join the Federal Reserve may be at risk of falling short, with two GOP senators quarantining due to COVID-19 and another three voicing their disapproval of the nomination.

The last-minute developments come as Senate Majority Leader Mitch McConnell attempts to fill the two remaining vacancies at the central bank before President-elect Joe Biden’s inauguration in January.

South Dakota Sen. John Thune, the second highest ranking Republican in the Senate, said Tuesday that he expects to have the votes “eventually” but cautioned that there could be complications along the way.

“With the absences now, we have some attendance issues, so it’s a little bit fluid, I’d say at the moment,” Thune said according to press pool reports.

On Saturday, Florida Senator Rick Scott entered quarantine after possible exposure to the virus. Another GOP Senator, Chuck Grassley of Iowa, said Tuesday morning that he too was immediately quarantining after possible contact with the virus.

Three Republicans have said they would not support Shelton’s nomination: Susan Collins of Maine, Mitt Romney of Utah, and as of Monday, Lamar Alexander of Tennessee.

In total, that means that a maximum of 48 GOP senators are available Tuesday to vote for Shelton. With 49 Democratic seats in the Senate, Shelton’s nomination could fall short if all 49 are present and vote “nay.”

That may not be a guarantee, with California Senator and Vice President-elect Kamala Harris possibly tied up with transition matters. In an unrelated floor vote Monday, Harris and six other Democrats were absent.

If the vote comes down to a tie, Vice President Mike Pence could step in as the tiebreaker to confirm Shelton.

Republicans may be running short on time to get Shelton confirmed; in early December Democrat Mark Kelly of Arizona will replace incumbent Republican Martha McSally, further tipping the scales in the Democrats’ favor.

Concern over independence

The whip count drama imperils a controversial candidate for the Fed, criticized for her close ties to Trump as an economic adviser during his transition into the presidency.

Shelton’s nomination nearly failed to make it out of the Senate Banking Committee, where she survived a party-line 13-12 vote. Shelton, previously a vocal advocate of re-installing the gold standard, endured a contentious confirmation hearing in February in which she backtracked on her support of such a monetary system.

WASHINGTON, DC - FEBRUARY 13: Judy Shelton testifies before the Senate Banking, Housing and Urban Affairs Committee during a hearing on their nomination to be member-designate on the Federal Reserve Board of Governors on February 13, 2020 in Washington, DC. (Photo by Sarah Silbiger/Getty Images)
WASHINGTON, DC - FEBRUARY 13: Judy Shelton testifies before the Senate Banking, Housing and Urban Affairs Committee during a hearing on their nomination to be member-designate on the Federal Reserve Board of Governors on February 13, 2020 in Washington, DC. (Photo by Sarah Silbiger/Getty Images)

“I would not advocate going back to a prior historical monetary arrangement,” Shelton told the Senate Banking Committee on February 13.

Ahead of the election, the GOP suggested that her confirmation would be a tough one to jam through. A top ranking Republican in the Senate had said in September he was unsure if they could corral the majority needed to confirm Shelton.

Alexander said Monday that he was not going to support Shelton because he was “not convinced that she supports the independence of the Federal Reserve Board.”

St. Louis Fed economist Christopher Waller was nominated alongside Shelton, but his path to confirmation has faced fewer obstacles. Waller advanced in the Senate Banking Committee in an 18-7 vote.

A vote on Shelton is expected Tuesday.

Jessica Smith contributed to this report.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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