Senate lawmakers negotiating the final version of a broad financial overhaul bill Thursday rejected a move to require the president of the New York Federal Reserve Bank be a presidential appointee, virtually ensuring that the proposal won’t make it into the final bill.
Sen. Jack Reed (D., R.I.) had asked for the change in a House proposal to reduce the influence of commercial banks on the appointment of regional Federal Reserve bank presidents.
Reed argued that the New York Fed president “has huge regulatory power,” noting that when Treasury Secretary Timothy Geithner held the position, he presided over the collapse of Lehman Brothers and the purchase of Bear Stearns.
The lawmakers’ vote was the first taken in the third day of the “conference committee” in which House and Senate lawmakers are hammering out the final version of the financial overhaul bill.
“I think someone in this country who has that kind of power who can make those kinds of decisions should be subject to the nomination and confirmation process,” Reed said of the New York Fed president.
But Senate Banking Committee Chairman Christopher Dodd (D., Conn.) was among the Senate negotiators rejecting the idea, saying the Senate already gets “bogged down” with the number of positions it has to review in the confirmation process.
Sen. Judd Gregg (R., N.H.), said confirming the New York Fed president would politicize the position. “You’re stepping on the slope of basically politicizing the Fed,” said Gregg.
Comment: Noting that Geithner held the same position doesn't indicate that the position is already politicized: so how could making the position a presidential appointment make it any less politicized? Are these guys smoking crack? How about getting rid of the Federal Reserve and completely remove the political element that effects more than just our monetary mechanisms.