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Collapse of Summers Bid for Fed Signals Liberal Revolt Against Obama

Image: Collapse of Summers Bid for Fed Signals Liberal Revolt Against Obama

Tuesday, 17 Sep 2013 08:58 AM

By John Gizzi

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While most of Washington was caught off guard Sunday by the announcement that Larry Summers asked the president not to consider him as chairman of the Federal Reserve, older hands said that the former secretary of the treasury was the victim of one of the oldest games in the nation's capital: Stop the Nomination Before the President Makes It.

"That's the way the Washington game is played – and has always been played," Stephen Hess, Brookings Institute Senior Fellow and onetime aide to four U.S. presidents, told Newsmax.

With Summers, a former president of Harvard University, widely considered President Barack Obama's first choice for one of the most powerful appointments any president can make, opposition to him began mobilizing more than three months ago.

The opposition came almost exclusively from the Democratic Party's left-of-center, which had never forgiven Summers for his support of deregulating parts of the banking industry while Bill Clinton's treasury secretary – a policy, they felt, which was in part responsible for the Wall Street collapse in 2008.

Three Democrats on the Senate Banking Committee announced last week they would oppose a Summers nomination to succeed outgoing Fed Chairman Ben Bernanke: Sens. Jon Tester of Montana, Sherrod Brown of Ohio, and Jeff Merkley of Oregon. On August 28, AFL-CIO President Richard Trumka, speaking at the Christian Science Monitor breakfast, left no doubt among reporters he favored Fed Vice Chairman Janet Yellen over Summers.

On Sunday night, sensing a battle royal in the Senate awaited him if he was nominated, Summers requested the president not tap him for the Fed chairmanship.

"What happened to Larry Summers is not particularly unusual," Hess said. "But in his situation, the opposition was more above board than in the past and certainly they were going for much bigger game."

Hess added that because of "the rise of this darned social media, everyone is a pundit and they could be very public with their opposition."

In the past, hoped-for nominations to high offices have been dashed. The difference between now and then is that, until recently, the "Stop the Nomination" game was almost exclusively a case of "insider politics."

In 1968, President-elect Richard Nixon was anxious to woo a high-profile Democrat into his Cabinet and very much wanted Sen. Henry "Scoop" Jackson of Washington to be secretary of defense. A liberal on domestic issues, Jackson was also a hardline anti-communist with a superb knowledge of the Pentagon and the military establishment.

"What's more he wanted the job," wrote the late columnist Robert Novak, noting that this "seemed to be a way to cap a distinguished career. He gave Nixon a tentative yes."

But when word leaked out, Jackson's Democratic colleagues in the Senate strong-armed him into changing his mind before a nomination was made. Democratic Sen. Edward Kennedy of Massachusetts, Novak recalled, "warned that Jackson's old colleagues in the Democratic cloakroom would make the Senate a living hell for him as Richard Nixon's defense secretary. Jackson regretfully declined."

That same year, Nixon's secretary of health, education, and welfare, Robert Finch wanted to name Dr. John Knowles, head of Massachusetts Hospital in Boston, as assistant secretary for health. But the American Medical Association would have none of it, reminding its friends on Capitol Hill that Knowles had testified before Congress: "I do believe in comprehensive pre-paid health insurance for all Americans on a public and private basis – if the private basis will not do, then I think the federal government has got to do it."

Republican Sens. Everett Dirksen of Illinois and Strom Thurmond of South Carolina weighed in at the Nixon White House against the nomination. Republican Rep. Bob Wilson of California, who as chairman of the National Republican Congressional Committee had benefited from the AMA's political action committee, told reporters: "Every time we get together with politically minded doctors, they say, 'We certainly hope Nixon doesn't nominate Dr. Knowles.'"

Finch eventually decided the anticipated battle was "just not worth it" and told Knowles he would not recommend him to the White House for nomination.

In the case of Larry Summers, the prospective nominee himself is the one who said it's "just not worth it" and asked his nomination not to be submitted.

"It's not terribly unusual in Washington," Hess said. "And it will probably be used someday as a textbook example of how the Washington game is played."

John Gizzi is chief political columnist and White House correspondent for Newsmax.

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