By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen
If we’re to believe the thin sourcing from CNBC’s John Harwood, sometime in the next few weeks, Larry Summers will be announced as the nominee to become the next Federal Reserve chair. As I mentioned when this came out, it’s fitting that the news broke on Women’s Equality Day. Indeed, after Janet Yellen resigns in disgust (at least that’s my assumption of what will happen next) there will be no women on the Fed board of Governors, with Elizabeth Duke already gone and Sarah Bloom Raskin nominated for a top position at Treasury. Add Jerome Powell (whose term expires next year) and you have five spots vacating in the next year. Does Summers even have four brothers?
Nominations of this type at least strip away the excuses that Obama has been somehow “misled” by his economic team. It’s beyond clear that he drove the Summers selection from the very beginning; he’s comfortable with Summers, he thinks the guy did a good job in 2009-2010, and he lines up ideologically with him. Maybe Barack Obama didn’t say personally that bringing in “cheap Chinese goods” is good for the U.S. economy, or that global warming requires a “go slow” approach, but that’s the perspective of his top advisor. So what’s the difference?
I don’t think there’s much hope at this point in blocking the nomination from the outside; apparently a chief executive can make terrible choices for dodgy reasons whenever he wants, as we’ve learned time and again. And someone who secured re-election largely on the strength of his appeal to women in the electorate can create a glass ceiling for the aforementioned gender, without much of a backlash. It’s good to be the king, especially when the court is so cowed (and by court I mean the professional DC liberal class).
However, we’re starting to see the stirrings of strategizing about whether Summers can get the votes in the Senate for confirmation. I start from the position that he can and will – I have seen far too little inclination from Senate Democrats to stand up to their party leader, and regardless of how big a game Republicans talk, when the officialdom wants something to happen, it usually does. Nevertheless, the capacity does exist to bottle up the nomination, particularly in the Senate Banking Committee, if not on the Senate floor. Reuters gamed this out:
Summers, who writes an opinion column for Reuters, has drawn the ire of two Democrats on the committee that will need to clear his nomination. And a third of the Democratic caucus in the Senate sent Obama a letter urging him to choose Yellen, putting the onus on the president to court Republicans to reach the required number of votes if he picks Summers instead […]
If Obama chooses Summers, the first hurdle would be getting through the Senate Banking Committee.
Obama’s fellow Democrats have a 12-10 majority on the panel, but two of them are Summers’ biggest critics within the party – Sherrod Brown of Ohio and Jeff Merkley of Oregon. Elizabeth Warren of Massachusetts, a consumer advocate and fierce critic of Wall Street, also sits on the committee.
Brown, who spearheaded the pro-Yellen letter, has told Reuters he would vote against Summers, while Merkley has said he has serious doubts about the former World Bank chief economist.
For her part, Warren is trying to reinstate a modern version of the Glass-Steagall Act – the 1933 law that barred banks from merging their investment activities with commercial banking, which Summers helped dismantle when he was Treasury Secretary in 1999.
If Brown follows through, the White House would need at least one committee Republican to support Summers for his nomination to be considered by the full 100-member Senate.
Things get trickier if Merkley and Warren also oppose him.
Emphasis mine. First of all, this is a threshold moment for the named Senators here, and if they really don’t want to see Summers at the Fed they should make it known very directly to the White House that their votes cannot be had. They don’t have to go public, though that might help. But they need to be direct. Brown has gone public, and good for him; Merkley has expressed “reservations,” and Warren has been very tight-lipped (it would not be enough to get a viral video out of some tough questions and then going along with the vote; Warren did oppose Michael Froman for U.S. Trade Representative over the TPP, so there’s precedent here for her). There are others in the caucus, like Maria Cantwell and Bernie Sanders, who could vote no if Summers advanced out of committee and onto the floor, but I think the deal is sealed at that point. It’s either committee or bust.
Reuters surmises that Bob Corker and Mike Johanns would be available to the President as votes for Summers, but that the roster gets thin from there. I could see Mike Crapo, the ranking member, vote for Summers as well, but it’s a toss-up. So there are a few questions here:
1) Is Warren, a freshman Senator with Presidential buzz, willing to defy the Administration in a way that would endear herself to some section of a primary base?
2) Just how many Republicans can Obama call on to give him a Summers vote? More important, what are the conditions on that exchange?
3) And this is the real key, is this a bug or a feature? I think the latter. You’re a President with a very tough set of fiscal fights coming up. You’ve wanted entitlement reforms for five years, but cannot get it worked out. You’ve been playing footsie with the Senate Republican caucus all year. Now you’re in a situation where you need Republican votes. Is it not advantageous to make the argument that you “got” important votes on a Democratic choice for an important policy position as part of whatever deal gets made, a deal you’ve pined for all along anyway?
I mean, any rational human would have given up on grand bargaineering by now, and none of this implicates the House. But it sure does help to create that “permission structure” in the Senate. It creates a series of favors that will have to get paid back. And then the White House can argue that they simply had to go along with, I don’t know, the chained CPI measure they put in their own budget, because it was a way to “get” Larry Summers, among other things.
I mean, it’s not like anyone is making a secret of this:
Summers’ path to confirmation becomes smoother if it reaches the full Senate, where a handful of Republicans are actively working with Obama on budget issues.
The group includes Republicans such as Lindsey Graham and John McCain, who have worked closely with Democrats on other contentious policy issues such as immigration reform.
Mitch McConnell may be so scared of a primary challenge that he could demand unity on a filibuster. But I doubt it. And the President would seem to be in a much better strategic position for his purposes getting Summers confirmed with 10 Republican votes than with 4.