Summers withdraws from consideration as next Fed chairman - The Buffalo News

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Summers withdraws from consideration as next Fed chairman

WASHINGTON – Former Treasury Secretary Lawrence H. Summers has withdrawn his name as a candidate for Federal Reserve chairman, in a startling development that raises new questions about who will lead the Fed when Chairman Ben S. Bernanke steps down in four months.

The other main candidates for the job have been Fed Vice Chairwoman Janet L. Yellen and former Fed Vice Chairman Donald L. Kohn, though it is still possible that President Obama may choose someone else. Time is short for nominating someone for the critical post, with a confirmation process expected to last several months.

Obama had been strongly leaning toward picking Summers, who helped him navigate the depths of the financial crisis and recession at the beginning of his term, and had assurances from Democratic leaders in the Senate that they would work to get him confirmed, according to people familiar with the matter.

But amid an intensifying uproar of liberal Democrats and left-leaning groups opposed to his nomination, Summers decided to withdraw his name Sunday, telephoning the president to tell him his decision.

“It has been a privilege to work with you since the beginning of your Administration as you led the nation through a severe recession into a sustained economic recovery,” Summers, a Harvard professor, wrote in a letter to the president. “This is a complex moment in our national life. I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.”

Obama accepted Summers’ decision, lauding him and saying he planned to continue to consult his former adviser.

“Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today,” Obama said. “I will always be grateful to Larry for his tireless work and service on behalf of his country.”

People close to the Fed process said Summers, 58, faced not only a rebellion among liberal Democrats, but also interruptions such as the debate over whether to strike Syria, that prolonged the process and allowed opposition to build.

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