President Joe Biden said on Friday that he plans to appoint Michael Barr, the dean of the University of Michigan’s school of public policy, as vice chairman for oversight of the Federal Reserve.
Barr’s selection comes after Biden’s top pick for the Fed job, Sarah Bloom Raskin, withdrew her nomination a month ago over opposition from Republicans and one Democrat, Sen. Joe Manchin of West Virginia. Critics of Raskin had argued that she would apply the Fed’s regulatory authority to climate change and possibly discourage banks from lending to energy companies.
But along with Barr, Biden noted the importance of politics in a Friday statement saying his nominee had previously cleared the Senate on a bipartisan basis.
“Michael brings the expertise and experience needed for this important position at a critical time for our economy and our families across the country,” Biden said.
The Democratic chairman said Barr “has spent his career protecting consumers and, during his time at the Treasury, played a vital role in the creation of both the Consumer Financial Protection Bureau and the position for which I appoint him “.
Barr is the dean of the Gerald R. Ford School of Public Policy in Michigan. He served as Assistant Secretary of the Treasury for Financial Institutions during the Obama administration and helped craft the 2010 Dodd-Frank regulations after the devastating 2008 financial crisis.
Barr, a Rhodes Scholar who worked for Justice David Souter on the Supreme Court, also served in the Clinton administration in the White House, Treasury Department and State Department.
Despite those credentials, some liberal critics last year blocked Barr’s candidacy to become the Biden administration’s Comptroller of the Currency, a position responsible for regulating national banks. These critics viewed Barr’s role on the advisory boards of financial firms Lending Club and Ripple Labs with suspicion. They also claimed it had helped water down proposals for tougher banking regulations under the Obama administration.
But Ohio Sen. Sherrod Brown, Democratic chairman of the banking committee, voiced his full support for Barr.
“Michael Barr understands the importance of this role at this critical time in our economic recovery,” Brown said. “I urge my fellow Republicans to abandon their old playbook of personal attacks and grandstanding and put Americans and their pocketbooks first.”
Others praise Barr and say he seems well suited to the Fed’s position.
David Dworkin, president of the National Housing Conference, which advocates for affordable housing, suggested Barr’s understanding of Wall Street gives him the right mix of ‘centrist expertise and progressive political views’ to win confirmation. in a tightly divided Senate.
Barr would join the Fed at a particularly difficult and high-risk time for the central bank and the economy.
The Fed is expected to raise interest rates aggressively in the coming months in an attempt to reduce persistently high inflation. Yet it will be extraordinarily difficult for Fed Chairman Jerome Powell – who is awaiting Senate confirmation for a second term – to slow inflation by raising borrowing costs without also weakening the economy and perhaps even cause a recession.
“It’s about landing a very complicated aircraft smoothly on the runway,” Dworkin said. “It’s very difficult to do.”