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BPC’s Justin Schardin: We Must End the New Normal of Fed Board Vacancies

American Banker

Monday, March 7, 2016

Recent headlines have dealt with all of the political complexity and legal uncertainty around filling Antonin Scalia’s Supreme Court vacancy. Yet historically, vacancies on the high court do not last very long. By contrast, appointing governors to fill open seats on the Federal Reserve Board has long been subject to extended delays, leaving the central bank chronically shorthanded.

Both the Supreme Court and Fed hold tremendous power in our government as nonpartisan, independent institutions populated by members with lengthy and expansive mandates affecting the lives of every American. But in marked difference to the political back-and-forth in the press over replacing Scalia, vacancies on the Fed board have generated little public notice, let alone any public concern.

And despite the political maneuvering over the court’s makeup following Scalia’s death, the truth is that Supreme Court vacancies usually don’t last that long. Nominees are generally put forward by the president, and acted on by the Senate, fairly quickly. Between January 1, 2000, and Scalia’s passing, there were four vacancies on the court. They took an average of only 25 days to fill. During that time, the court was without a full nine members less than 2% of the time.

For decades after the Fed board was reorganized in the 1930s it also usually operated at full strength. That has changed dramatically in recent years. According to the Bipartisan Policy Center’s Nominations Tracker, during the same period when the Supreme Court had a vacancy only 2% of the time, the Fed board had at least one vacancy almost 75% of the time. During three separate periods since 2009 – all totaling 103 days – the Fed has operated with only four of its seven governors in place.