U.S. Senator Richard Shelby, R-Alabama, said, “The President can not fire the Chairman of the Federal Reserve without cause.” Shelby made the comments during a lengthy interview on the CBS News Program, “Face the Nation.”
CBS broadcast journalist Margaret Brennan asked Shelby: “Sir I know you spent a long time on the Banking Committee, and so I want to ask you, because this government shutdown is weighing on the financial markets along with some unusual comments from the treasury secretary about the health of the credit markets. You also had the president publicly criticizing the chairman of the Federal Reserve. Can you reassure Wall Street when it opens tomorrow that there’s not a reason to be concerned?”
“Well we’re all concerned about the economy,” Sen. Shelby replied. “The economy’s been very good. It’s- it’s probably the best economy I’ve seen in years and years if not my lifetime. But the Federal Reserve is the back bone, is the bedrock of our financial system. It’s set up to be independent. I don’t believe blaming the Federal Reserve for this or that, whoever the president or a congressman or senator is, helps matters. The president cannot fire the chairman of the Federal Reserve except for cause. I think Chairman Powell, myself, is doing a good job.”
On Wednesday, December 19 Federal Reserve Chairman Jerome “Jay” Powell announced that the Federal Reserve was raising the rate that it charges banks to borrow money and that the Fed was likely to raise rates again in 2019. The announcement triggered a massive selloff of stocks that last for four days all the way to Christmas Eve. An enraged President Donald J. Trump (R), who appointed Powell reportedly told aides that Powell “is making me look like Hoover.” Herbert Hoover was President during the stock market crash of 1929 that began the Great Depression. The New York Times reported that Trump was considering firing Powell. On Saturday, December 22 Treasury Secretary Steve Mnuchin denied that the President had any intention of removing Jay Powell. The markets lost most of 2018’s gains in the four days following the rate hike, but has rebounded significantly after Christmas.
Sen. Shelby said that he has met with the President and Vice President in an attempt to end the government shutdown.
“I had lunch with the president and the vice president last Saturday and we talked at length about it, how to bring it to a close,” Shelby said. “How to fund the government. And the president made some proposals through the vice president. I made some proposals to Senator Schumer, the night before. But right now we’re at a standoff, and I think that’s not good for the Senate, the House, or America. We can do better and we’ve got to figure out a way, Margaret, to get to yes. If we blame each other this could last a long, long time.”
Shelby said “Right now our negotiation are at an impasse at the moment. I wish it were not so.”
“Nobody’s gonna win this kind of game,” Sen. Shelby stated. “Nobody wins in a shutdown. We all lose and we kind of look silly.”
The President is holding up legislation to fund the government on demands that the Congress appropriate $5 billion for construction of his border wall. Shelby said that he offered a compromise where the President got $2.5 billion for border security in 2019 and $2.5 billion in 2020; but that compromise was ultimately rejected.
The federal government went into partial shutdown at midnight on December 21 and as of press time there did not appear to be an end in sight. Twenty five percent of the federal workforce has been told not to come to work and it is unclear when even essential personnel will get paid for their work.
Senator Richard Shelby is the Chairman of the powerful Senate Appropriations Committee. He has served Alabama in the U.S. Senate since 1987. Shelby previously served four terms in the U.S. House of Representatives and two terms in the Alabama Senate. Richard Shelby lives in Tuscaloosa.
(Original Reporting by CBS News’ Margaret Brennan, Fox News, CNBC, and the Hill contributed to this report.)