BUSINESS
12/23/2010 08:15 am ET | Updated May 25, 2011

Peter Diamond, Nobel Prize-Winning Economist, Has Fed Nomination Scuttled By Congressional Inaction

WASHINGTON: The nomination of Nobel prize-winning economist Peter Diamond to the Federal Reserve's Board was scuttled on Wednesday when the Senate failed to vote on it before adjourning for the year.
A professor at the Massachusetts Institute of Technology, Diamond had a strong expertise on budget and tax issues. This research focus prompted criticism from some Republicans who argued he lacked the proper experience on monetary policy.

The U.S. Senate Banking Committee approved Diamond's nomination in November, sending it for a full Senate vote three months after his appointment was first blocked. The Senate completed its work for the current Congress without acting on the nomination again.

Diamond has been unusually vocal on a wide range of topics for a nominee who was still in limbo. He expressed his opposition to extending Bush-era tax cuts for the wealthy in an interview with Reuters last month, saying "it would not be good policy."

Despite such criticism, echoed by many Democrats, the tax cuts were passed as part of a deal between the White House and Republicans that will also extend emergency unemployment benefits and reduce payroll taxes.

(Editing by Carol Bishopric)

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