WASHINGTON, D.C. — Today, U.S. Senator John Barrasso (R-WY), ranking member of the Senate Committee on Energy and Natural Resources (ENR), sent a letter to U.S. Senate Banking Committee Chairman Sherrod Brown (D-OH) and Ranking Member Pat Toomey (R-PA) voicing his opposition to the nomination of Ms. Sarah Bloom Raskin to be vice chair of supervision at the Federal Reserve.
In the letter, Barrasso highlights Raskin’s nomination as part of President Biden’s war on American oil, natural gas, and coal. Barrasso points to Raskin’s past statements opposing investment in the American fossil fuel industry. He specifically highlights a 2021 piece Raskin wrote in the Financial Times that declares it’s time for the Federal Reserve to encourage banks to stop investing in fossil energy companies.
Barrasso’s letter was sent ahead of the Senate Banking Committee’s hearing on Raskin’s nomination this Thursday, February 3.
Read the full letter here and below.
Dear Chairman Brown and Ranking Member Toomey,
I am writing to you in strong opposition to the nomination of Ms. Sarah Bloom Raskin to be Vice Chair of Supervision at the Federal Reserve, a position that would give her tremendous regulatory power over banks and finance.
Ms. Raskin is the wrong choice at any time, but especially now when American families already are suffering from the hardship of policy-induced high energy prices.
This nomination is part of President Biden’s war on American oil, natural gas, and coal—the source of nearly four-fifths of our nation’s energy. If confirmed, Ms. Raskin has given every indication she will impede companies from raising capital for new energy projects.
We are already seeing signs of underinvestment in U.S. oil and natural gas projects, which is affecting the ability of U.S. energy producers to keep pace with post-COVID demand growth. Recently, I wrote in Newsweek on the dangers of the Biden administration’s efforts to block investment in all types of American energy. I have attached that op-ed to this letter for your reference.
If this underinvestment continues, today’s energy inflation will accelerate. Instead of looking for ways to encourage investment in traditional American energy, Ms. Raskin has said she would look for ways to block it.
In a May 28,2020 opinion piece in the New York Times, “Why Is the Fed Spending So Much Money on a Dying Industry?,” she argued that that the Federal Reserve should have excluded fossil fuel companies from the emergency lending program that Congress authorized under the CARES Act. Congress designed this program specifically to prevent sound businesses from succumbing to the economic collapse the pandemic caused.
She claimed, “The Fed is ignoring clear warning signs about the economic repercussions of the impending climate crisis by taking action that will lead to increases in greenhouse gas emissions at a time when even in the short term, fossil fuels are a terrible investment.”
Even President Biden’s nominee for Federal Reserve Vice Chair, Lael Brainard, explained at her nomination hearing, that she understood that the Federal Reserve could not discriminate against businesses which the radical left considers unfashionable.
Ms. Raskin compounded her error when she added that, “The decisions the Fed makes on our behalf should build toward a stronger economy with more jobs in innovative industries—not prop up and enrich dying ones.”
Far from dying, traditional American energy is essential today. Imagine how much worse the current inflation would be had the Federal Reserve taken Ms. Raskin’s dreadful advice.
The country still will be using fossil fuels for many decades to come. We should work to make sure this American industry has access to capital to produce more domestic energy. Such investment is good for our economy, our workers, and our balance of trade. It is also better for the environment to produce energy here rather than import more of it from countries with lower environmental standards.
Ms. Raskin, however, has another agenda. Her support for using the Federal Reserve to bend the economy to her political objectives will influence every decision she makes as the top bank regulator, even if it means exceeding the authority granted by Congress.
Ms. Raskin followed up her New York Times piece with one in the January 11, 2021 Financial Times, declaring it was time for the Federal Reserve to encourage banks to stop investing in fossil energy companies. She proposes that, “Supervisory adjustments will have to take climate disclosures into account and the Fed will need to use climate risk data to make decisions on asset purchases . . . Fiduciary duty rules, too, may need to be reimagined.”
In a June 3, 2021 speech, she also advocated for using bank stress tests to drive banks away from fossil fuel companies.: “Stress testing is exactly one of the . . . financial regulatory tools that regulators, in particular central banks, have at their disposal.”
Her justification for these extreme views is the mistaken notion that continuing to capitalize traditional American energy will lead to unchecked climate change “bring about economic catastrophe” and “flatten an economy and grind it to dust.” If we have learned anything over the past year, it that it the Biden Administration’s assault on traditional energy has brought on the “economic catastrophe” of sky-high inflation and energy costs.
The American energy sector has been a leader in innovation reducing climate emissions. In the power sector, emissions in 2020 were 40 percent below their 2007 peak. Such innovation requires capital to continue.
Starving American companies of the resources they need to both power our country and reduce emissions is foolish. It is also outside the Federal Reserve’s charter. The Federal Reserve is charged with two goals: stable prices and maximum employment. Congress did not authorize, and no one expects, the Federal Reserve to involve itself in regulating America’s energy industry or directing investment in that industry toward certain types of fuels or technologies, either directly or indirectly.
Ms. Raskin’s extreme public statements on the appropriate role of the Federal Reserve make it abundantly clear that her radical ideology has gotten the better of her judgment. Should the Senate confirm her, we cannot say we have not been warned when the Federal Reserve exceeds its authority, starves U.S. energy companies of capital, puts Americans out of work, and reinforces inflationary pressures. Indeed, the energy crisis roiling Europe should give us a preview of the economic fiasco that can be created from underinvesting in reliable and secure oil, natural gas, and coal.
Ms. Raskin is a dangerous choice for this important position. I ask that you and your colleagues reject her nomination.