When Will Critical Fed Vacancies be Filled?

Have last year’s changes to the U.S. Senate’s filibuster rule changed the speed at which independent financial regulators are nominated or confirmed? It is too soon to answer that question, but the unusual number of current and upcoming vacancies on the Federal Reserve Board of Governors (Board) will provide a notable test case in the Senate.¹

Several current and former Board governors believe that vacancies on the Board have a significantly negative impact on the Board’s ability to do its job and to do it well.² Five of the seven spots on the Board are currently or soon will be vacant, or are filled by a confirmed member whose term has expired.³ In January, President Obama sent four Federal Reserve Board nominations to the Senate: for Stanley Fischer to be both a governor and vice chairman, for Lael Brainerd to replace Elizabeth Duke, and for Jerome Powell to serve another term. Both Fischer and Powell were nominated before their predecessors left those positions, meaning there was no gap between nominations. However, it took 713 days from the expiration of Duke’s term in January 2012 for the president to nominate her replacement. Duke continued to serve during most of this period (almost two years), although it took 135 days from the time Duke stepped down to nominate her successor. The president has yet to nominate anyone to replace Sarah Bloom Raskin, who left office in March, or Jeremy Stein, who has announced his departure and is scheduled to leave later this month. The Board nominees, however, have been specifically targeted by Sen. Rand Paul (R-KY), who has threatened to block all Board nominees until he is granted a vote on his bill to audit the Federal Reserve. ^{4, 5} These five positions are among those that the Bipartisan Policy Center (BPC) will be watching in the coming months to see whether the new Senate rules have made an impact.

In April 2013, BPC published its Analysis of the Nominations Process for Financial Regulators who were in office, or were nominated, on or after January 1, 2000. On the same day, we launched our Nominations Tracker, which shows detailed information on past and current nominations and vacancies and is updated daily. We drew four primary conclusions from the data:

1. Heads of single-director agencies take much longer than other nominees to nominate and confirm.
2. The process for commission chairs is significantly shorter than for commissioners who are not chairs.
3. Nominations have taken longer to make and confirm for President Barack Obama than for President George W. Bush.
4. Presidents take longer to nominate than it takes for the Senate to confirm nominees.

The data below depicts the mean and median number of days under a variety of circumstances.⁶

	NUMBER OF DAYS FOR PRESIDENT TO NOMINATE		NUMBER OF DAYS FOR SENATE TO RESOLVE
Nominees of …	Mean	Median	Mean	Median
All Agencies	239	132	138	90
Single-Director Agencies	439	402	229	189
All Commission Members	222	123	131	88
Commission Non-Chairs	237	132	130	88
Commission Chairs	74	16	135	71
President Clinton (limited sample)	327	160	197	136
President Bush	179	123	98	51
President Obama	233	167	162	133

For the Federal Reserve Board specifically, nominations to seats on the Board⁷ in our data have taken a mean of 174 days and a median of 114 days for the Senate to resolve.⁸ These numbers are somewhat higher than for other non-chairs of commissions, which in our report data were a mean of 130 days and a median of 88 days.

Although we did not attempt to identify the causes of the delays for filling and resolving nominations, it is reasonable to suspect that the elimination of the filibuster for nominations, which requires 60 votes in the Senate to overcome, would result in a faster overall process for confirming nominees. Thus, the November 21, 2013 change in the Senate rules to limit the use of the filibuster only to nominations to the Supreme Court held out the possibility of speeding up the overall process. While there is some evidence that judicial nominations are being approved at a higher rate since November,⁹ less than six months later, there are too few data points available to know whether the process has been streamlined.

We plan to update our analysis later this year. In the interim, the Nominations Tracker will provide daily progress updates.

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¹ There are several other positions currently open or awaiting Senate action, including three pending nominations for the Commodity Futures Trading Commission and one commissioner of the National Credit Union Administration. Only Sharon Y. Bowen, however, who was nominated in January 2014 to replace Bart Chilton, was nominated following the filibuster rule changes.

² Binyamin Applebaum, “Vacancies Post Threat to the Fed,” The New York Times, May 12, 2014. Available at: http://www.nytimes.com/2014/05/13/business/as-seats-go-unfilled-federal-reserve-board-could-drop-to-three-members.html?hpw&rref=business&_r=0.

³ Janet Yellen’s term as chair runs through February 3, 2018, while her 14-year term as a Board governor expires in 2024. Daniel K. Tarullo’s term expires in 2022. Jerome Powell continues to serve on the Board, but his term expired on January 31, 2014. He has been nominated to serve another term.

⁴ Kevin Cirilli, “Rand Paul Threatens to hold Fed nominees for audit bill vote,” The Hill, May 12, 2014. Available at: http://thehill.com/policy/finance/205895-paul-objects-to-fed-nominees-without-audit-bill-vote.

⁵ Federal Reserve Transparency Act of 2013, S. 209, 113th Congr. (2013).

⁶ The data shown in this table are as of April 1, 2013.

⁷ Not including nominations for chairman, vice chairman, or vice chairman for supervision.

⁸ Data is as of May 13, 2014. Senate resolution includes confirming or rejecting a nominee, withdrawal of a nomination by the president, or the Senate returning a nomination to the president.

⁹ Jay Newton-Small, “Senate Rushes to Confirm Obama’s Judicial Nominees,” Time, May 12, 2014. Availabe at: http://time.com/96809/senate-rushes-to-confirm-obamas-judicial-nominees/.