WASHINGTON — Peter Diamond got a third green light from a U.S. Senate panel Wed nesday to join the Federal Reserve, but the economics Nobel laureate still faces political hurdles, leaving the Fed with two empty seats on its board in Washington for now.
The Senate Banking Committee voted 12-10 along party lines to push Diamond forward, highlighting the political divide on his nomination. While Democrats retain control of the Senate, they need at least seven Republicans to support his candidacy to reach the 60-vote supermajority required in the chamber.
Sen. Richard Shelby, R-Ala., the ranking minority member on the panel, repeated his opposition to the Massachusetts Institute of Technology economist, labeling him “an old-fashioned big-government Keynes ian.”
Senate GOP leadership is deferring to Shelby on the matter, meaning that as long as the Alabama Republican continues to oppose Diamond’s joining the Fed, his nomination is almost certain to remain frozen.
Sen. Mike Johanns, R-Neb., who had backed Diamond in the panel vote twice before, Wednesday announced he would no longer support someone so outspoken in favor of more government spending and of the Fed’s easy-credit policies to lift the economy.
President Barack Obama first nominated Diamond to the post in April 2010. After his nomination wasn’t taken up last summer by the Senate, the White House was forced to renominate him. In the meantime, the MIT economist in October won a Nobel Prize in economics.
