Shelton, a longtime Fed critic who supports a return to the gold standard, was stopped in a 50-47 vote that was shaken up by some GOP senators being absent and Vice President-elect Kamala Harris going to the Senate floor.
Senate Majority Leader Mitch McConnell (R-Ky.) required just 50 Republicans to vote for Shelton to move her nomination ahead.
The upper house of Congress has a 53-47 GOP majority, for now, suggesting that McConnell could let himself lose three votes to push Shelton through. If a 50-50 tie appeared, Vice President Mike Pence would be able to vote in favor and break the tie.
McConnell was dealt multiple blows before the vote. Republicans Mitt Romney of Utah, Susan Collins of Maine and Lamar Alexander of Tennessee all pledged to fight Shelton.
Then Sens. Chuck Grassley (R-Iowa) and Rick Scott (R-Fla.), both of whom encouraged Shelton’s nomination, were incapable of voting because they were quarantining due to the coronavirus. Grassley had tested positive while Scott had been exposed.
In another twist, Alexander announced Monday he would be unable to vote on Shelton’s nomination because he is needed elsewhere for "family matters"
To help the Democrats prevent the nomination, Harris returned to the Senate floor in her position as a California senator to vote against Shelton, helping enough to beat them.
“Senator Harris knows this is an important vote, and she’s here for it. She didn’t need contacting,” Senate Minority Leader Chuck Schumer (D-NY) explained.
McConnell himself voted against Shelton, a tactic which, for procedural purposes, provides him the ability to bring the nomination back for another vote.
If he decides to bring Shelton’s nomination up for another vote, he will face a new obstacle: a single incoming Democratic senator.
Sen.-elect Mark Kelly (D-Ariz.) will be sworn in and follow Sen. Martha McSally (R-Ariz.) when the Senate returns after Thanksgiving to serve out the remainder of the late Sen. John McCain’s term.
Kelly is largely assumed to fight Shelton’s nomination.
Her nomination was passed by the Senate Banking Committee in July on a 13-12 party-line vote. Another President Trump nominee, Christopher Waller, was established at the same time 18-7.
Shelton’s opinions on interest rates have moved in lockstep with Trump’s. She has also shown doubt over the Fed’s need to set policy independently from the president and Congress.
The US dropped the gold standard, a system in which currency is backed by gold, in 1933 throughout the Depression when Congress passed a resolution nullifying the right of creditors to demand payments in gold.