Lisa Cook, Associate Professor at Michigan State University, arrives for dinner Thursday, August 23, 2018, for dinner during the Jackson Hole Economic Symposium in Moran, Wyoming, sponsored by the Federal Reserve Bank of Kansas City.
David Paul Morris | Bloomberg | Getty Images
The Democratic Chair of the Senate Banking Committee sees economist Lisa Cook, an advocate for the elimination of racial and gender inequalities, as his first choice to fill the remaining position on the Federal Reserve Board of Directors, people familiar with the matter told CNBC.
If Cook were nominated and confirmed, he would be the first black woman on the Fed’s board of directors.
A staff member familiar with the thinking of Senator Sherrod Brown said Ohio lawmakers supported Cook’s candidacy for the Fed’s Board of Governors based on her expertise, research and experience as a black woman.
Cook is Professor of Economics and International Relations at Michigan State University. She also serves on the steering committee of the Center for Equitable Growth, a progressive think tank in Washington that has alumni of several of President Joe Biden’s top economists.
Other congressional officials warned that while Cook is a favorite among committee chairs, he is still in the early stages of the review process and that some Democrats have yet to meet with potential candidates before making a final decision.
Staff spoke to CNBC on condition of anonymity as the Fed’s deliberations are private and ongoing.
However, confirmation from Cook is not guaranteed. With a 50:50 split in the Senate, Cook must win the support of every Democrat to confirm the seat. The top Republican banking committee, the retired Senator from Pennsylvania Pat Toomey, has not yet publicly evaluated any candidates for a seat on the board.
A representative from Toomey’s office did not immediately respond to CNBC’s request for comment.
Still, Brown’s early support for Cook could prove invaluable in the months ahead as the White House deliberates who to appoint to the central bank’s governing committee.
The Fed’s governors have an overwhelming influence on the central bank as a voter at every regular meeting of the Federal Open Market Committee to decide whether to adjust interest rates in the US economy. The full term of office of a governor is 14 years.
Read more about CNBC’s political coverage:
In Cook, Democrats would likely find a Fed governor who approves of progressive policies that prioritize issues such as maximum employment, income inequality, and the elimination of racial economic disparities.
While the decision of who to nominate rests with the president, Cook’s background would likely appeal to a Biden administration focused on building the middle class, eradicating racial inequalities, and improving the country’s health care and infrastructure.
Earlier this year, Cook wrote an essay on the need to include more women and people of color in the science-based, innovative workforce. For example, Cook predicted that equal representation of women in engineering and innovation professions could increase US GDP per capita by 2.7%.
This kind of thinking underscores a central pillar of the emerging Biden Doctrine: This government should help open the doors to women and people of color in lucrative and growing areas such as green energy technology, which have traditionally been male dominated.
Neither the White House nor Cook immediately responded to CNBC’s request for comment.
The Biden administration is in the process of building support in Congress and across the country for Biden’s national agenda, particularly two massive laws that would fundamentally transform parts of the US economy.
The American Jobs Plan, an infrastructure-focused proposal, would invest $ 2.3 trillion in rebuilding hard infrastructure over a decade, but it would also fund scientific innovation, pay for household help, and build half a million charging points for electric vehicles.
The related proposal, the American Families Plan, calls for $ 1.8 trillion to fund social programs that include paid family vacations, free early childhood education, and a free community college.
The White House hopes to fund much of that spending through its Made In America tax plan, a major overhaul of tax law designed to expand the IRS to tackle tax evasion and end the strengthened basis for valuation of inherited capital Profits and introduction of a global minimum tax rate of at least 15%.
The Biden team has also proposed raising the U.S. corporate rate to between 25% and 28%. He wants households making more than $ 1 million a year to pay more for capital gains and close the interest income gap.
Cook isn’t the only progressive economist being considered for the vacant seat. Bloomberg News reported in February that the government was also looking at William Spriggs, chief economist at the AFL-CIO, the country’s largest trade union federation.
The post of governor is vacant because Biden’s predecessor, President Donald Trump, did not find enough support for his preferred candidate Judy Shelton. It was scrutinized for having spoken out in favor of a return to the gold standard years earlier.
The first term of the current Fed chairman, Trump-appointed Jerome Powell, expires next February. If Biden appoints any of the current directors to succeed Powell, he will likely be given the opportunity to fill a second seat on the bank’s board of directors.