Already stung by his complete failure to marshall support for U.S. military action in Syria, President Obama yesterday accepted former-National Economic Council Director Larry Summers decision to withdraw his name for consideration to become the next chairman of the Federal Reserve.
Acrimony avoided ...
Summers, Obama's reported top choice to be the next Fed chair, blamed an "acrimonious" confirmation process for his decision not to seek the job. Indeed, not only did 20 liberal Democratic senators send a letter to Obama this July, asking him to appoint Fed Vice Chair Janet Yellen instead, but four Democratic senators on the Senate Banking Committee (Sens. Sherrod Brown, D-Ohio, Jeff Merkley, D-Ore., Jon Tester, D-Mont., and Elizabeth Warren, D-Mass.) also announced they would vote against Summers if he was nominated.
... for now
But now that Summers is out, will Obama give the base of his party what they want by nominating Yellen? Obama clearly values personal relationships and loyalty on his economic team.
His statement on Summers' withdrawal even mentioned "his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future."
But Obama could still go with another familiar name for the nomination. Former Treasury Secretary Tim Geithner is a strong possibility, as is renominating current Fed Chair Ben Bernanke. If Obama goes with someone other than Yellen, Summers' withdrawal may be a fight delayed, not a fight avoided.
Does this embolden Republicans?
Obama is clearly feeling politically weak at the moment. If he felt he was in a strong position, he would have bombed Syria without congressional approval, like he did in Syria, and he would have granted unions an Obamacare carve-out last week, like he did for employers earlier this year. But Obama is falling in every poll, as is his foreign policy job approval, as is his signature domestic accomplishment, Obamacare.
Obama has blinked on the debt limit before. Will he blink again next month and delay more, or all, of Obamacare for another year?
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