Jeff Merkley wins his fight against Larry Summers

Kari Chisholm

Since 1987, exactly two men have served as chairman of the Federal Reserve System: Alan Greenspan and Ben Bernanke. This fall, President Obama will nominate Bernanke's successor.

For months, it's been assumed that President Obama would nominate Larry Summers, who served as President Clinton's third and final Secretary of the Treasury.

On Sunday afternoon, Summers announced that he would withdrawn himself from consideration in a letter to the President:

"I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.”

Why did Summers withdraw? Because Senator Merkley led the fight to scuttle his nomination. Back in July, Merkley told Bloomberg News:

“If you nominate someone who is a life-committed deregulator to be in a regulatory position, and if you believe regulation is necessary to prevent fraud, abuse, manipulation and so forth, then there’s a lot of questions to be asked: Why is this person appropriate?”

And on Friday, Senator Merkley let the White House know that Summers was cooked. From Reuters:

The death knell for Lawrence Summers' candidacy to lead the Federal Reserve came on Friday morning with a shock phone call message left for President Barack Obama's chief of staff, Denis McDonough.

The message was from Democratic Senator Jeff Merkley, a member of the Senate Banking Committee from Oregon and a vocal critic of the prospects of a Summers nomination for the central bank's chairmanship.

Merkley told the White House that there were now five Democrats on the committee, which would have to clear the nomination before a final Senate vote, who would oppose Summers, a former Treasury secretary under President Bill Clinton and a close confidante of Obama's.

As Willamette Week noted, this was a "gutsy play" for a first-term Senator like Senator Merkley.

I am, for one, very proud of our Senator today. As he said many times during the 2008 campaign, there's no point in going to Congress if you're just going to sit around and let the powers-that-be run things the way they always have. Change is coming, and we're getting America back on track.

Update: The New York Times adds a bit of color to the story. It seems that Senator Merkley's call to the White House happened while he was at the Pendleton Round-Up:

Mr. Merkley had patchy cellphone reception at the Pendleton Round-Up, a rodeo in eastern Oregon. Mr. McDonough was dealing with other business and could not be reached, so Senator Merkley left a message with his staff. That spotty phone call — reflecting the revolt of a number of prominent Democrats, many of them from the liberal wing of the party, but not limited to it — helped to seal Mr. Summers’s fate.

Nice. This kinda puts the lie to the idea that when Senators aren't in Washington, they're "on vacation". Nah, it's just working back in the state they represent.

By Kari Chisholm Sept. 17, 2013