Federal Reserve

Key Senate committee approves Shelton, Waller for Fed positions

Key Points
  • Judy Shelton and Christopher Waller gained important approval Tuesday from the Senate banking committee as nominees to the Federal Reserve's board of governors.
  • Shelton was approved on a party-line 13-12 vote, while Waller's vote was 18-7.
  • Shelton has come under fire for her support of the gold standard and questions regarding Fed political independence.
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Senate panel approves Fed nominee Judy Shelton by 13 to 12 vote

The Senate banking committee on Tuesday approved controversial Federal Reserve nominee Judy Shelton as well as Christopher Waller for two vacancies on the central bank's board of governors.

Their nominations now head to the full Senate for confirmation. President Donald Trump had announced his intention to nominate the pair in July 2019 but the move had been held up during the coronavirus pandemic and amid mounting controversy over Shelton.

Shelton gained the committee's nod on a party-line 13-12 vote five months after a contentious confirmation hearing on her views. 

"Every Democratic member of this committee thinks we should have another hearing and talk to her and frankly reject her," said Sen. Sherrod Brown, D-Ohio. "Dr. Shelton is a threat to our economy, our democracy, our country."

Waller was approved by an 18-7 margin.

If the two get final approval, that would mean Trump has filled six of the seven Fed governor seats. 

While Waller faced little opposition during a confirmation hearing in February, Shelton had a much harder time.

She faced persistent and at-times hostile questions about her support for the gold standard, her beliefs on whether bank deposits should be insured and whether the Fed should be independent of political influences.

Leading up to Tuesday's vote, Rep. Don Beyer, D-Va., vice chair of the Joint Economic Committee, released a statement opposing Shelton's move to the central bank, said her "extreme ideas" should disqualify her from confirmation.

"The current economic crisis once again has underscored the critical role of the Federal Reserve and the need for strong, independent leadership at the central bank. Judy Shelton miserably flunks that test," Beyer said.

During her confirmation hearing, Shelton walked back some of her more controversial positions, earning still more scorn from Democrats who said she was disowning those beliefs for the sake of being confirmed.

Sen. Mike Crapo, the Idaho Republican who chairs the banking panel, said Shelton during the hearing and in subsequent written testimony addressed the questions raised by the committee.

"I'm confident that her deep understanding of the Fed's monetary policy toolkit, monetary history and commitment to maintaining Fed independence will serve the Fed well in its ongoing efforts to stabilize markets, and toward its mission of price stability and full employment," Crapo said.

In addition to her role as an advisor for Trump, Shelton has worked at the Hoover Institution and was the U.S. director for the European Bank for Reconstruction and Development. Waller's nomination was far less controversial.

More than 100 economists signed a letter to the Senate advocating for his confirmation. He is executive vice president and director of the St. Louis Fed. Waller also has taught economics at Notre Dame and the University of Kentucky.

Still, Brown voted against Waller, saying that the nominee favored less restriction on banks. Brown also objected to the "package deal" nature of the nominees.

Correction: Sen. Mike Crapo is an Idaho Republican. An earlier version misstated his party affiliation.