Sen. Merkley bucks party line to oppose Fed chair Powell

Oregon’s junior senator cites risky investments, climate change in his dissent while Sen. Ron Wyden joins the majority in the 80-19 vote last week. 

PETER WONG

Oregon Capital Bureau

Oregon’s Jeff Merkley was among  five Democratic U.S. senators who voted against Jerome Powell’s nomination to a second four-year term as chairman of the Federal Reserve Board, which oversees the nation’s central banking system.

But Powell was confirmed by a vote of 80-19 on Thursday, May 12. Oregon’s Ron Wyden, a Democrat who leads the tax-writing Finance Committee, voted with the majority.

Most of the 13 dissenters were Republicans. Merkley was one of five Democrats to vote no, along with Vermont’s Bernie Sanders, an independent who sides with Democrats.

Going back to the mid-1950s, only one Fed chair, Janet Yellen, has been denied a second term. President Donald Trump chose to appoint Powell in 2018 to succeed Yellen, who was President Joe Biden’s choice to become U.S. Treasury secretary in 2021. Biden reappointed Powell as Fed chair.

Merkley also opposed a second term for Ben Bernanke in 2010, but President Barack Obama reappointed Bernanke and the Senate confirmed him. Yellen became Fed vice chairwoman that year, and chairwoman four years later.

Merkley’s statement after the vote:

“The Federal Reserve holds an important responsibility to safeguard our financial system and seize opportunities to build a stronger economic future. Jerome Powell failed to earn my vote for a second term as Federal Reserve chair because he’s failed to take climate change seriously as an economic threat or to ensure giant financial institutions are not loading up on risk.

“Climate change is an urgent and systemic economic threat. Tackling climate change requires all levels of government, from the local level to the highest levels of the federal and international governments. During his tenure, Chair Powell resisted calls for the Fed to use its tools, and during a hearing this year he said, ‘We are not and we don’t seek to be climate policymakers.’ This is not good enough. We need a Fed chair who understands the risks that climate chaos poses to our economy and who is prepared to take this head-on by giving regulators the tools they need to ensure we have a strong economic future.

“I’m also disturbed that under Chairman Powell, the Federal Reserve weakened guardrails that were supposed to protect Americans from the Wall Street Casino, including weakening the Volcker Rule. I wrote the Volcker Rule to prevent banks from engaging in the highest-risk investments that brought about the 2008 economic crash.

“Our economy has been through some big transitions in the last 15 years that have bolstered the wealthy but battered most Americans. We are continuing to face new and evolving economic challenges American families can’t afford another pummeling. We need a chair who we can count on to prioritize an economy that serves the American people now and into the future, not one designed simply to enrich big investors and corporate executives.”