BUSINESS

Obama Renominates MIT Economist Peter Diamond For Fed Board

01/06/2011 09:54 am ET | Updated May 25, 2011

WASHINGTON (Reuters) - President Barack Obama on Wednesday renominated economist and Nobel laureate Peter Diamond to the Federal Reserve Board, sticking with a pick that has already been thwarted by Senate Republicans twice.

Diamond, who won the Nobel Prize for economics in October, together with two other economists for their analysis of labor markets, has been backed twice by the Senate Banking Committee but both times was denied a full Senate vote.

The White House said on December 23 that Obama planned to renominate Diamond to serve as a Board governor. On Wednesday it formally announced Diamond's name had been sent back to the Senate, together with other Obama nominations.

Diamond was initially nominated in April. But several Republican Senators, possibly annoyed by Diamond's public opposition to extending Bush-era tax cuts for wealthier Americans, questioned the Massachusetts Institute of Technology professor's qualifications for the Fed job, his Nobel Prize notwithstanding.

Obama ultimately compromised over tax cuts for American families making more than $250,000 a year, agreeing to a two-year extension to protect breaks for all taxpayers, and an extension of aid for the long-term unemployed.

After Diamond was first approved by the Senate Banking Committee, a senator used a procedural obstacle to stall his confirmation.

Obama renominated Diamond and the panel approved him a second time. But Republicans insisted on a full Senate debate on the appointment and time ran out as the Congress rushed to complete a busy legislative agenda before year-end.

Fed Board governors, led by the Fed chairman, and together with the presidents of the 12 regional Federal Reserve banks, steer U.S. monetary policy and set U.S. interest rates.

(Reporting by Alister Bull, editing by Chris Wilson)

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