WASHINGTON — Sen. Elizabeth Warren, a potential presidential candidate who has faced criticism for her tenure on the Senate banking committee, has announced that she will oppose President Donald Trump’s nomination of Jerome Powell to be chairman of the Federal Reserve.
Sen. Tim Scott of South Carolina, the No. 3 Republican in the Senate, announced his opposition as well, casting doubt on the path of the nomination.
In a joint statement released by her office Thursday, Warren, D-Mass., and Scott called Powell’s nomination an extension of a policy of “massive Wall Street bailouts and lax regulations” that have exacerbated economic instability in the years since the 2008 financial crisis.
“These policies have led to a dire financial crisis and left families struggling to get by. We need to rebuild public trust in our institutions, not create more of them,” the statement said.
Among other concerns, the two Democrats highlighted the growing role of Wall Street in the Fed, which will soon vote on rules required by Dodd-Frank legislation, as well as Powell’s close ties to the financial sector.
“We cannot allow former Wall Street CEOs to run our nation’s top financial regulator,” the senators said.
If confirmed, Powell would replace current Chairwoman Janet Yellen, whose term expires Feb. 3. Yellen has said she will abide by that deadline, although she might withdraw from consideration if the administration nominated a more controversial candidate.
Trump has focused on selecting individuals who he believes will support his agenda of repealing regulations and reducing taxes, rather than a deep commitment to financial regulation. Powell would take over from Yellen, who was the first woman to hold the job and the first to be nominated by a Democratic president.
While Trump has said he doesn’t need a nomination approval from the Senate before beginning his term, he and the White House believe that an announcement is necessary in order to prepare the process and govern on a Congress in which Democrats have a strong majority.
Over the last few weeks, Trump has publicly flirted with the possibility of nominating former Federal Reserve board member Kevin Warsh for the job, which he held from 2004 to 2006. Warsh could pose an especially challenging profile for a confirmation given his recent call for a balanced approach to regulation.
Powell has said that he would like to see an increase in the Fed’s holdings of Treasuries and other securities, a point that Democrats have made a priority as they move to use the Fed’s ownership of nearly $4 trillion in assets as a way to propose greater oversight of monetary policy and strengthen oversight of the nation’s banking sector.
Powell is also a member of the Financial Stability Oversight Council, an oversight committee within the Treasury Department, that is supposed to monitor the country’s financial sector. But Trump has already said he would like to shrink the council and has not publicly opposed the view that the council has too much power.
Both Democrats and Republicans have publicly criticized his nomination so far, with Democrats criticizing the fact that he has never served on the Fed.
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, said Wednesday night that he is “extremely disappointed” that Warren has joined the vocal minority opposing the nomination.
“With oversight, reform and transparency absolutely critical to an independent Federal Reserve that’s supposed to keep the economy strong, it’s a shock to hear that Sen. Warren will put her own political ideology ahead of her role as a guardian of the American people’s taxpayer-funded bailout guarantees,” Hensarling said in a statement.
Paul Ryan, the House speaker, is also a critic of the nomination.
“This nominee is far outside the mainstream on the vital issues affecting our economy,” Ryan said in a statement. “We need a Fed chairman who understands how to encourage growth and protect Americans’ money.”
The Senate Banking Committee has scheduled a confirmation hearing for Powell on Jan. 9. The nomination could not be withdrawn before that date, meaning a vote could come as early as the following week.