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Sen. Elizabeth Warren (D-MA) speaks with reporters at the Capitol in Washington, May 2, 2024.
Wall Street lobbyists made a huge push to block Sen. Elizabeth Warren’s (D-MA) takeover of the top Democratic slot on the Senate Banking Committee, but it did not succeed. Warren will take that position in January.
“I’ve spent my entire career fighting to make our economy work better for middle-class families—not just for the wealthy and well-connected,” Warren said in a statement. “Decisions made by the Senate Committee on Banking, Housing, and Urban Affairs have a powerful impact on Americans’ lives, and I’m grateful for the opportunity to fight for families who most need a government on their side.”
Some big hitters tried to prevent this reality, including one of the chief objects of Senate Banking Committee oversight: Federal Reserve chair Jerome Powell.
According to sources who requested anonymity, Powell joined a push to persuade Sen. Mark Warner (D-VA) to preempt Warren’s ascension by taking the top spot himself. Warner declined to do so, he confirmed on Tuesday. It’s not clear whether Powell’s actions took the form of direct or indirect communications, just that there was some level of involvement. The role of Powell in the lobbying effort has not been previously reported.
UPDATE: After press time, a Fed spokesperson issued a statement to the Prospect pushing back on the claims: “Chair Powell has never been directly or indirectly involved in congressional committee assignments.”
Two of the top three Banking Committee Democrats, Sens. Sherrod Brown (D-OH) and Jon Tester (D-MT), lost their races last week. Two other senior Democrats, Sens. Jack Reed (D-RI) and Warner, already have the lead Democratic positions on other committees; Armed Services for Reed and Intelligence for Warner. Under caucus rules, senators can only serve as the ranking Democrat on one committee at a time.
That would mean that the next-highest Democrat in seniority, Warren, would rise to the top Democratic slot. She has served on the committee since 2012. Since Republicans took the Senate in the elections, Warren would be the ranking member of the Banking Committee, with Sen. Tim Scott (R-SC) serving as chair.
Warren has a long list of plans for the financial system, including the Stop Wall Street Looting Act that would take on the private equity industry, and ideas around boosting housing supply. “In the aftermath of the 2024 election, it’s powerfully important for Democratic leadership to show that we can make life more affordable for working people and to act with urgency to rebuild our middle class, ” Warren said.
But the ranking member doesn’t dictate votes or investigations on the committee. Sen. Scott would control the committee calendar and nomination schedule, and with Republicans in control, Warren’s vision is just not going to get realized in 2025 and 2026.
Warren has a history of aggressive questioning in Banking Committee hearings, including several dustups with Powell.
Still, lobbyists feared the possibility of Warren obtaining any position of power over Wall Street, which she could hold in future Congresses should Senate elections go Democrats’ way. So they worked overtime to stop Warren’s rise, with the main strategy trying to convince Warner to switch away from the top Democratic spot on the Intelligence Committee to instead take over Banking.
The effort faced long odds. Seniority is not something easily messed with; in a legislative body where a single senator can stop action and bring the chamber to a halt, everyone zealously guards the process by which they rise to power, and resists giving colleagues a reason to hold grudges that they can take out on their legislation. Politico reported last week that lobbyists had resigned themselves to the likelihood that Warner will not switch and Warren will obtain the top Democratic slot.
On Tuesday, Warner confirmed that he would be staying put on the Intelligence Committee. “Whether it’s threats posed by a revanchist Russia, an emboldened China, cyberhacking, or the rise of AI, our national security is facing down a multitude of enormous challenges,” he said in a statement. “President-elect Trump must work to address these issues while respecting the independent expertise of the Intelligence Community, and I plan to continue carrying out robust oversight as Vice Chairman of the Intelligence Committee.”
Yet the role of Powell in this debate may have reverberations next year. The Senate Banking Committee has oversight of Powell’s Federal Reserve, which prizes its political independence. Typically, it is frowned upon when entities try to pick their regulator or their oversight officials.
Warren has a history of aggressive questioning in Banking Committee hearings, including several dustups with Powell.
When asked about this by the Prospect, the Federal Reserve initially declined to comment. Warner’s office did not return a request for comment.
This is not the first time that bank lobbyists have tried to influence Warren’s committee assignments. When she first won election to the Senate in 2012, there was an attempt to keep her off the Banking Committee altogether. That failed, and she has served there ever since, rising through the ranks.
Committee assignments will not be officially released by Senate Democrats until next year.
