Trump’s pick for a key Fed slot says he wouldn’t quit his White House job. That’s unprecedented

President Donald Trump’s pick for a top slot at the Federal Reserve said Thursday that he won’t resign from his White House job if he’s confirmed by the Senate, setting up what could be an unprecedented move and raising fresh concerns about an erosion in the usual separation between the central bank and the executive branch.

Stephen Miran, currently the chief economist on the White House Council of Economic Advisors, said he intends to take a temporary leave from his post to serve out four months as a member on the Fed’s Board of Governors. Then, he said, he’d return to the White House.

“What is required is an unpaid leave of absence,” Miran told lawmakers in a Senate Banking Committee hearing that stretched over two hours. “As long as that is the advice of the council, I will follow the law.”

Miran’s announcement sparked almost immediate criticism from Democrats on the panel. “You're going to be technically an employee of the president of the United States but an independent member of the board of the Federal Reserve,” said Sen. Jack Reed of Rhode Island. “That’s ridiculous.”

Even Republicans on the panel pushed Miran to operate independently from the White House. “You’ve got to call [things] like you see them,” said Republican Sen. John Kennedy of Louisiana. “Ignore all the rhetoric from all politicians.”

A former top Fed official rebuked Miran’s move, as well. “This dual-reporting structure is exactly the opposite of independence,” Sarah Bloom Raskin, an ex-Fed governor, wrote in an email. “I would predict that a clear-eyed Senate would view this proposed arrangement as contrary to the Federal Reserve Act, and a show stopper.”

As Thursday’s hearing got underway, Miran said that maintaining the Fed’s independence is “paramount” and otherwise pledged to make monetary policy decisions of his own accord. That, however, did little to dissuade Democrats from any concerns that Miran would serve as a White House emissary within a traditionally independent institution.

Last year, Miran wrote a proposed set of reforms to improve the central bank for the Manhattan Institute. One of those reforms was barring Fed governors from serving in the executive branch for four years “to further insulate board members from the day-to-day political process.” Now, Miran finds himself on a path he once criticized. On Thursday, he defended his past proposal as “a package deal”; he’d previously written that he was comfortable with “piecemeal implementation.”

Over the summer, Trump has engaged in a relentless campaign to push the central bank to drastically lower interest rates. The president has channeled the bulk of his anger toward Fed Chair Jerome Powell, labeling him “Too Late Powell” and otherwise lambasting the central bank chief on a near-daily basis for not yet adjusting borrowing costs.

The Fed’s next meeting to decide interest rates will take place on Sept. 16 and 17. Depending on the speed of Miran’s Senate confirmation process, he could be seated on the 12-member Federal Open Markets Committee by then. Miran can only lose the support of three GOP senators to still be confirmed.