By Nick Timiraos
Senate Republicans' bid to confirm Judy Shelton as a Federal Reserve governor appears unlikely to succeed now that a new Democratic senator has been seated, denying President Trump's nominee the votes needed for approval.
The Senate voted Wednesday to advance the confirmation of another of Mr. Trump's Fed nominees, Christopher Waller, the r esearch director at the Federal Reserve Bank of St. Louis. The Senate voted 50-45 to clear a final procedural hurdle before Mr. Waller's confirmation vote, which is likely to occur Thursday.
Mr. Waller, whose term would run through January 2030, has attended meetings of the Federal Open Market Committee this year in his capacity at the St. Louis Fed. He headed the University of Notre Dame's economics department before joining the regional Fed bank in 2009.
Republicans' majority in the U.S. Senate fell to 52-48 on Wednesday when Sen. Mark Kelly (D., Ariz.) was sworn in after winning a special election Nov. 3, defeating Republican Sen. Martha McSally.
Three Republicans are opposed to Ms. Shelton's nomination. If Mr. Kelly votes with all Senate Democrats and independents, who are opposed, she would lack the necessary support for confirmation.
A Nov. 17 procedural vote to advance Ms. Shelton's nomination failed, 47 to 50, due to the absences of two GOP senators who would have voted in her favor, Rick Scott of Florida and Chuck Grassley of Iowa. They were absent due to coronavirus-related precautions. Two other Republicans, Susan Collins of Maine and Mitt Romney of Utah, voted against the confirmation, as did all the chamber's Democrats and independents.
Senate Majority Leader Mitch McConnell, who supported Ms. Shelton's confirmation, changed his vote to "no" to preserve the ability to bring up the nomination later. A second attempt faces long odds now that Mr. Kelly has been seated. It would require an opponent to be absent or change their vote.
Republicans also could try to confirm Ms. Shelton in the next term of Congress should they win two Jan. 5 runoff elections for Senate seats in Georgia. That would give them a 52-48 margin in the Senate and, accounting for opposition from Mr. Romney and Ms. Collins, they could rely on Vice President Mike Pence to break a 50-50 tie.
There would be a window narrow for that to happen. It would require the White House to submit the nomination anew and the Senate to vote after the Jan. 5 elections are decided and before Mr. Trump leaves office Jan. 20.
Mr. Trump nominated Ms. Shelton earlier this year to fill a Fed board vacancy with a term that runs through 2024. Party-line votes for Fed board positions hadn't occurred before, reflecting the central bank's normally apolitical nature. If she is confirmed, Ms. Shelton would likely do so with the fewest votes of any Fed governor since at least 1980.
The confirmation of either Mr. Waller or Ms. Shelton would be the first Fed governor confirmed in a so-called lame-duck period that follows a November election before the president's term ends in January, according to Peter Conti-Brown, a Fed historian at the University of Pennsylvania.
Ms. Shelton's path to confirmation first appeared to be in doubt after a rocky Senate hearing in February that revealed doubts among Republicans and unified opposition from Democrats. She has been a longtime proponent of a return to the gold standard, which would limit the Fed's ability to influence inflation and employment. "I don't claim to be in the mainstream of economists," she said at her hearing.
Republicans voiced misgivings over her public statements and writings, including a notable shift away from favoring tighter monetary policy that some said indicated opportunism as she sought to secure Mr. Trump's favor for the nomination.
As a single vote on the seven-member board, Ms. Shelton's impact on the Fed's decision-making would be limited. But she could still use her ability to make speeches and give interviews to color how policy debates are framed by market and policy analysts.
Ms. Shelton's supporters said she would likely bring a much more critical view toward the Fed's bond purchases, a program it began taking since cutting its short-term interest rate to near zero in March.
Write to Nick Timiraos at nick.timiraos@wsj.com
Corrections & Amplifications
This item was corrected on Dec. 10, 2020 to clarify that to win a Senate confirmation vote, a nominee needs the votes of a majority of those present. An earlier version incorrectly implied that 51 votes are necessary.
(END) Dow Jones Newswires
12-02-20 1423ET
