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Recess Appointments And The Fed

By Matthew Yglesias  

"Recess Appointments And The Fed"

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At Dan Pfeiffer’s talk this morning at Netroots Nation, he seemed to express the view that it’s not possible to use recess appointments to fill vacancies on the Federal Reserve Board of Governors. This is, to the best of my knowledge, false. Doing a Fed recess appointment would be unusual but this Congressional Research Service document (PDF) on recess appointments indicates that Ronald Reagan did it. What’s more, it indicates that the controversy that step created had some useful consequences:

On May 31, 1984, President Reagan nominated Martha R. Seger to be a member of the Board of Governors of the Federal Reserve System. The Senate Banking Committee had held four days of hearings and approved her nomination by the close vote of 10 to 8. A spirited floor debate was expected, but that was foreclosed when Reagan gave her a recess appointment on July 2 after Congress took a three-week break for the Fourth of July holiday (from June 29 to July 23). Senator William Proxmire, chairman of the Banking Committee, accused Reagan of abusing his recess appointment powers and promised to devise remedies that would restrict the President’s authority. Lawmakers also objected to other recess appointments made by Reagan.

On August 8, Senator Max Baucus offered an amendment to a supplemental appropriations bills, calling on President Reagan to withdraw the recess appointment for Seger. The Senate voted 53-43 to table the amendment. A day later, Senate Minority Leader Robert C. Byrd introduced a Senate resolution (S.Res. 430), stating that it was the sense of the Senate that the power to make recess appointments should be confined to situations in which the Senate has formally terminated a session or in which the Senate will be in recess for longer than 30 days. That resolution was never put to a vote, but a year later the Senate passed a different resolution offered by Senator Proxmire (S.Res. 194), expressing the sense of the Senate that recess appointments should not be made to the Federal Reserve Board except under unusual circumstances, and only for the purpose of fulfilling “a demonstrable and urgent need” in the administration of the board’s activities. The Senate also agreed to consider nominations to the board in an expeditious manner. The resolution was agreed to by voice vote.

On June 13, 1985, the Senate confirmed Seger by voice vote for a term expiring in 1998. On this occasion the Senate Banking Committee voted 11-4 for her confirmation. Although there was controversy over her recess appointment, there was never a question of using a funding restriction to deny appropriated funds for her salary. The Federal Reserve relies on nonappropriated funds to support its operations.

Not to prescribe any particular approach, but I think the general lesson here is that if you want to make progress on nominations you need to press forward. The Obama administration started its term by not making Fed nominations in a timely manner, they then never pressed publicly (or as far as I know privately) for speedy confirmation of their nominees, then they never publicly objected when Peter Diamond was blocked, then they declined to use (or threaten to use) their recess appointment powers, and they haven’t publicly put forward any alternatives to Diamond. It’s genuinely unclear how much of a difference the details of the composition of the Federal Reserve Board has made to policy outcomes, but at a minimum it’s difficult to see how having more governors urging more stimulative action in place couldn’t have made things at least a little bit better.

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