Donald Trump’s bid to place Judy Shelton on the board of the Federal Reserve appeared to be in danger after a senior Republican said she lacked enough support in the Senate to win confirmation.
Ms Shelton’s nomination as a governor of the US central bank has been controversial from the beginning, because of her sympathy for the gold standard, her fierce criticism of the Fed as an institution, and her loyalty to Mr Trump, which raised questions about her independence.
Her chances of securing a coveted position at the US central bank had been boosted in late July after the Senate banking committee advanced her nomination on a 13-12 party line vote, with all Republicans backing her and all Democrats opposing her.
But on Tuesday, John Thune, a Republican senator from South Dakota and a member of the party’s leadership, threw cold water on the prospects for a quick final vote on Ms Shelton’s nomination, saying she lacked the votes to be confirmed. Republicans hold 53 of the 100 Senate seats.
Susan Collins, the Maine Republican, and Mitt Romney, the Utah Republican, are publicly opposing her appointment to the Fed. Mr Thune suggested resistance was more widespread even though Republican leaders had not thrown in the towel.
“We’re still working,” Mr Thune told Bloomberg News. “She’s a priority for the White House. It’s the Federal Reserve. It’s important. So obviously we want to get it done, but we’re, you know, we’re not going to bring it up until we have the votes to confirm.”
Economists who served Republican and Democratic administrations in the past have criticised Ms Shelton’s fitness for the Fed job. She has recently served as the US representative on the board of the European Bank for Reconstruction.
“She has advocated for a return to the gold standard; she has questioned the need for federal deposit insurance; she has even questioned the need for a central bank at all,” said more than 100 economists including Alan Blinder, who worked under Bill Clinton in the White House, and Douglas Holtz-Eakin, who worked for George W Bush in the White House, in a letter to senators last month.
“Now, she appears to have jettisoned all of these positions to argue for subordination of the Fed’s policies to the White House — at least as long as the White House is occupied by a president who agrees with her political views.”
In an interview with the Financial Times last year, Ms Shelton lamented the “Soviet” powers of the Fed.
“If the success of capitalism depends on someone being smart enough to know what the rate should be on everything . . . we’re doomed. We might as well resurrect Gosplan,” she said, referring to the state committee that ran the Soviet Union’s planned economy.
Mr Trump has also nominated Christopher Waller, an economist at the St Louis Fed, to fill another vacancy on the Fed board. Mr Waller has been far less controversial and he is set to win confirmation in a final vote.