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Diamond Fed Nomination Likely to Be Blocked Again, Shelby Says

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Federal Reserve Nominee Peter Diamond
Peter Diamond, nominee for the U.S. Federal Reserve board of governors, speaks during a Senate Banking confirmation hearing in Washington, D.C. Photographer: Jay Mallin/Bloomberg

March 10 (Bloomberg) -- Nobel Prize-winning economist Peter Diamond is likely to fail in his third try at confirmation for a seat on the Federal Reserve Board, said the senior Republican senator overseeing the central bank.

“We’ve blocked him twice,” Alabama Senator Richard Shelby said today in a radio interview with host Laura Ingraham, according to an audio clip distributed by his office. “I think we’re going to block him three times.”

Diamond’s absence would deprive Fed Chairman Ben S. Bernanke of additional intellectual support for his record monetary stimulus. If Diamond, 70, remains a nominee, he may be in limbo through the end of 2012 unless Senate Democrats push for a floor debate on his candidacy and try to round up 60 votes to break a possible Republican filibuster.

“The administration can do better,” Shelby, 76, said in the interview after repeating his criticism that Diamond has insufficient knowledge of monetary policy. “What we need on the Fed is somebody that’s not interested in just printing money.”

The White House renominated Diamond in January, marking a third try at confirmation after the Senate adjourned in December without approving him. Diamond’s initial candidacy was returned to the White House in August under a procedural objection.

While Shelby repeated and amplified his opposition to Diamond at a nomination hearing March 8, the senator declined to tell reporters at the time whether he would try to block a vote.

‘Superbly Qualified’

Democratic senators indicated March 8 they would support Diamond again after the committee voted twice by 16-7 margins in 2010 to recommend approval to the full Senate. Rhode Island Senator Jack Reed, the panel’s No. 2 Democrat, said Diamond is “superbly qualified.”

Since Diamond’s renomination this year, Fed Governor Kevin Warsh announced his resignation, opening a second vacancy on the central bank’s board. The White House has yet to pick a replacement. Diamond’s nomination is for a term ending January 2014.

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net.

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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