Biden nominee Sarah Bloom Raskin accused of seeking to politicize Fed against oil industry

Republicans seeking a poster child for soaring energy prices under the Biden administration may have got their wish in Federal Reserve nominee Sarah Bloom Raskin.

Mrs. Raskin, a former Obama administration official, was grilled at Thursday’s hearing by Senate Republicans who ripped her statements against banks’ lending to oil-and-gas companies and accused her of seeking to bankrupt the fossil fuel industry by politicizing the Federal Reserve.

Sen. Patrick J. Toomey of Pennsylvania, the ranking Republican on the Senate Banking Committee, said that her proposals to mitigate “climate-related financial risk” would have “devastating consequences not just for energy workers, of which we have millions, but also consumers, who would have to pay much more for energy.”

“The real risk is unelected officials like Ms. Raskin who want to misuse banking regulatory powers to impose environmental policies that Congress has refused to enact,” Mr. Toomey said.

“Ms. Raskin has repeatedly and specifically advocated that the Fed allocate capital away from the fossil fuel industry as a way to combat climate change. She says the quiet part out loud,” he added.

Republicans zeroed in on her support for using financial regulations to steer capital from fossil fuel companies, which she has called a “dying industry,” and her 2020 op-ed urging the Federal Reserve to prevent oil-and-gas firms from accessing emergency pandemic lending under the CARES Act.

“The Fed is ignoring clear warning signs about the economic repercussions of the impending climate crisis by taking action that will lead to increases in greenhouse gas emissions at a time when even in the short term, fossil fuels are a terrible investment,” Mrs. Raskin wrote in her New York Times op-ed.

Under questioning, Mrs. Raskin said that she “the whole point of the op-ed was that the Fed should not pick winners and losers,” prompting Sen. John Kennedy, Louisiana Republican, to retort, “except for oil and gas. You said they ought to be allowed to go broke.”

Sen. Bill Hagerty, Tennessee Republican, said he was worried about “weaponizing the Fed and using it to attack industries like the oil-and-gas industry, particularly right now when we see energy prices through the roof.”

President Biden nominated Mrs. Raskin last month to serve as the Federal Reserve’s vice chair for banking supervision as his administration continues to send mixed signals on climate change and fossil-fuel production.

In December, Energy Secretary Jennifer Granholm urged oil producers to “hire more workers” and “get your rig counts up,” according to Energy Intelligence, a message at odds with the administration’s efforts to curtail oil-and-gas leasing on federal lands and its cancellation of the Keystone XL pipeline.

Sen. Sherrod Brown, the Ohio Democrat who chairs the committee, blasted what he called a “coordinated effort by some to paint her as some sort of radical,” pointing out that she served as deputy treasury secretary and as a Federal Reserve governor under President Obama.

“No one is better equipped than Ms. Raskin to protect Americans from risks that could bring down financial markets and institutions and wreck people’s savings – from cybersecurity threats to climate financial risk,” said Mr. Brown.

President Biden has nominated someone for the Federal Reserve who has made clear she wishes to use the power of the central bank to effectively destroy the U.S. oil and gas industry. (1/6) pic.twitter.com/8Y5Uv8pGXA

— U.S. Senator Bill Cassidy, M.D. (@SenBillCassidy) February 3, 2022

Mrs. Raskin’s nomination has met with statements of opposition from 41 oil-and-gas trade associations, the American Energy Alliance, the Competitive Enterprise Institute, and Senate Republicans.

“If you think the price of gas is high now, just wait until Sarah Bloom Raskin gets to the Federal Reserve,” tweeted Sen. Tom Cotton, Arkansas Republican. “Raskin is a ‘climate warrior’ who wants to bankrupt American energy companies. The Senate should reject her nomination.”

In a letter last week, the U.S. Chamber of Commerce asked whether it was the Fed’s role “to direct capital away from certain industries that are politically disfavored.”

On the other hand, the American Bankers Association issued a statement congratulating her immediately after her Jan. 14 nomination was announced.

Senate Republicans have managed to beat back several left-wing Biden nominees, most recently Saule Omarova, who in December withdrew her nomination for banking comptroller after several moderate Democrats indicated they would oppose her.

So far that has not happened with Mrs. Raskin, who is married to Rep. Jamie Raskin, Maryland Democrat.

A key swing vote, Sen. Joe Manchin III, West Virginia Democrat, said Tuesday he thought the five Federal Reserve nominees, who include Mrs. Raskin, “all look extremely qualified,” according to American Banker.

In addition to Mrs. Raskin, the committee quizzed Lisa Cook and Philip Jefferson, both of whom were nominated to serve as Federal Reserve governors.