Central bank bashing

6 August 2010 By James Pethokoukis

The central bank has as much impact on the country as the Supreme Court. Yet its candidates are generally treated far more gingerly by Congress. The Senate’s blocking of Peter Diamond’s nomination hints this may be changing. It bodes poorly for the future of Fed independence.

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The U.S. Senate on Aug. 5 scrapped the nomination of Peter Diamond to the Federal Reserve Board, dealing a blow to President Barack Obama's push to fill longstanding vacancies at the central bank.

The Senate returned the nomination to the White House, according to aides to Senate Majority Leader Harry Reid, effectively killing it. The president has the option of resubmitting Diamond's nomination.

Diamond, an MIT professor and expert on taxes and Social Security, faced opposition from Republicans in the Senate Banking Committee, which backed his nomination last month by a 167 margin, clearing the way for a vote in the full Senate.

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