By Gabe Rubin
September 16, 2015 at 3:31 pm ET
The blame game over Senate Banking Committee nomination hearings, or lack thereof, shows no sign of letting up soon.
Although the committee will hold its first nomination hearing in this Congress on Thursday, both sides cautioned that the hearing should be seen as the exception rather than the rule. Little progress has been made towards breaking the partisan logjam on financial services nominees. The Obama administration currently has 11 nominations pending under the committee’s jurisdiction.
“We’ll be looking at them,” said Sen. Richard Shelby, the committee chairman, in an interview. But Shelby stuck to his earlier position that certain nominations, especially that of Federal Reserve vice chair for supervision, should be put forward before the committee considers any of the other nominees, including those of two other Fed governor positions.
“They’ve nominated two to the Fed— but they also haven’t nominated anyone to be vice chairman [for supervision]. I think they ought to go ahead and do that and then we’ll consider the nominations, together,” Shelby said.
The Obama administration has consistently deflected questions regarding a nominee for vice chair of supervision, despite bipartisan interest in filling the position from the likes of the Banking Committee’s top Democrat, Sen. Sherrod Brown of Ohio. On a conference call with reporters about financial regulation Wednesday, Deputy Secretary of the Treasury Sarah Bloom Raskin declined to comment on nominees.
The fact that the vice chair position has gone unfilled since 2010, despite being required under the Dodd-Frank financial reform legislation, is puzzling to many analysts. “It’s not clear why this position is such a low priority,” said Mark Calabria, the director of financial regulation studies at the Cato Institute and a former aide to Shelby on the Banking Committee, in a recent interview.
The vice chair position will likely attract more congressional attention later this month, when Fed Chair Janet Yellen is expected to testify on bank supervision issues before the House Financial Services and Senate Banking committees. The date of her testimony has yet to be announced.
Senate Democrats bristle at Shelby’s position on nominees and warn that it could prove problematic for future deal-making prospects. “The Republicans’ decision to drag their feet on every nominee this year could come back to haunt them later,” said a Senate Democratic aide by email.
Democrats see partisan maneuvering at play in the twilight of President Obama’s time in office. They fear that Republicans are content to bide their time in the hopes that a Republican will occupy the White House come January 2017.
“By contrast to this year’s lack of action, in 2007, the seventh year of the Bush Administration when Senate and White House control were also divided, the Banking Committee held three nomination hearings before the August recess and the Senate confirmed more than a dozen nominees who had been discharged or reported out of our committee,” wrote Banking Committee Democrats to Shelby just before the August recess.
The reason for the Thursday hearing is likely a matter of opportune timing unrelated to the fight over nominees. The committee will consider the nomination of Adam Szubin for Under Secretary of the Treasury for Terrorism and Financial Crimes, a post he already holds in an acting capacity. Few expect his nomination to be contentious, as he is a career Treasury official widely considered to have the proper qualifications for the position.
However, senators are likely to use the hearing to rehash their positions on the Iran nuclear deal, which Szubin had a role in negotiating. His position oversees all U.S. economic sanctions, including those related to the Iranian nuclear program.
Vocal opponents of the deal, including Democrats like Sens. Robert Menendez (D-N.J.) and Chuck Schumer (D-N.Y.) sit on the committee, as well as Republicans including Sen. Bob Corker (R-Tenn.), the chairman of the Senate Foreign Relations Committee, and Sen. Mark Kirk (R-Ill.), the co-author of several Iran sanctions acts.
And, despite the nomination hearing, Szubin will not receive a confirmation vote from the committee on Thursday.
The Banking Committee has been bogged down in several partisan fights since the start of this Congress in January, most prominently over a Shelby-sponsored banking bill, which would overhaul significant portions of the Dodd-Frank law. Most recently, Shelby successfully attached the bill as an amendment to a financial services appropriations bill. At the same time, he maintained that he would prefer to pass standalone legislation with Democratic input and support. So far, no Democrats have stepped up.
“Ideological riders that are designed to roll back Wall Street reform are a non-starter,” Sen. Chris Coons (D-Del.) told reporters on Wednesday.
A key aspect of the Shelby legislation mandates that the president fill the Fed vice chair for supervision position.
Gabe Rubin previously worked at Morning Consult as a reporter covering finance.