{ "id": "IN10796", "type": "CRS Insight", "typeId": "INSIGHTS", "number": "IN10796", "active": false, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 602539, "date": "2017-10-04", "retrieved": "2020-01-02T16:49:06.015128", "title": "Federal Reserve: Background and Reappointment of Previous Chairs", "summary": "Janet Yellen\u2019s term as Federal Reserve (Fed) Chair expires February 3, 2018. Subject to Senate confirmation, President Trump may reappoint her or nominate another individual to replace her. This Insight reviews the reappointment and background of previous Fed Chairs. \nThe qualification requirements to serve in Fed leadership are general\u2014statute requires the President to \u201chave due regard to a fair representation of the financial, agricultural, industrial, and commercial interests, and geographical divisions of the country.\u201d Yellen and her immediate predecessor, Ben Bernanke, had similar backgrounds\u2014both were PhD economists with previous experience at the Fed, in the executive branch (both were Chair of the Council of Economic Advisers), and in academia. Since the Fed\u2019s beginning in 1914, the 15 Fed Chairs have had diverse educational and professional backgrounds.\nFor background on the Fed, the nation\u2019s central bank, see CRS In Focus IF10054, Introduction to Financial Services: The Federal Reserve, by Marc Labonte.\nReappointment\nThe President appoints Fed governors to a 14-year term, subject to Senate confirmation. Governors may not be reappointed after having served one complete 14-year term, but may be reappointed if they served out only the partial remainder of a term. The President appoints one of the governors as Chair, subject to Senate confirmation, for a 4-year renewable term. A fixed term with reappointment for the Chair was not added to the Federal Reserve Act until 1935.\nOverall, six of eight Chairs eligible for reappointment\u2014including five of the last six Fed Chairs preceding Chair Yellen\u2014were reappointed at least once, as shown in Table 1. Four were reappointed by a different President\u2014in each case, by Presidents from different parties for at least one of their terms. The two Chairs not to be reappointed at least once were (1) G. William Miller, who left the Fed to become Treasury Secretary, and (2) Thomas McCabe, who was forced to resign over policy differences. \nIf not reappointed as Chair, Yellen could choose to remain on the board until her term as governor expires in 2024, but this is rare. The last Chair to do so was Marriner Eccles, who was not reappointed as Chair in 1948, but remained as governor until 1951. Three other Chairs could potentially have been reappointed to additional terms, but were not. According to Allan Meltzer\u2019s A History of the Federal Reserve, Arthur Burns was not reappointed to a third term by President Carter and Paul Volcker did not seek a third term. Ben Bernanke did not seek a third term, according to his autobiography. (Alan Greenspan and William McChesney Martin Jr. were not eligible to serve additional terms.)\nTable 1. Fed Chair Appointments\nFederal Reserve Chair\nYears Served as Chair\nAppointing/Reappointing President \n(Year Term Began)\n\nJanet Yellen\n2014-present\nObama (2014)\n\nBen Bernanke\n2006-2014\nGeorge W. Bush (2006), Obama (2010)\n\nAlan Greenspan\n1987-2006\nReagan (1987), George H. W. Bush (1992), Clinton (1996, 2000), George W. Bush (2004)\n\nPaul Volcker\n1979-1987\nCarter (1979), Reagan (1983)\n\nG. William Miller\n1978-1979\nCarter (1978)\n\nArthur Burns\n1970-1978\nNixon (1970, 1974)\n\nWilliam McChesney Martin, Jr.\n1951-1970\nTruman (1951), Eisenhower (1956, 1959), Kennedy (1963), Lyndon Johnson (1967)\n\nThomas McCabe\n1948-1951\nTruman (1948)\n\nMarriner Eccles\n1934-1948\nFranklin Roosevelt (1934, 1935, 1940, 1944)\n\nEugene Black\n1933-1934\nFranklin Roosevelt (1933)\n\nEugene Meyer\n1930-1933\nHoover (1930)\n\nRoy Young\n1927-1930\nCoolidge (1927)\n\nDaniel Crissinger\n1923-1927\nHarding (1923)\n\nWilliam Harding\n1916\u20131922\nWilson (1916)\n\nCharles Hamlin\n1914-1916\nWilson (1914)\n\nSources: Senate nominations database of the Legislative Information System, Congressional Record, and news articles.\nNotes: A fixed term with reappointment for the Chair was not added to the Federal Reserve Act until 1935 (P.L. 74-305, 49 Stat. 684). The Chair position was referred to as governor before 1935.\nFederal Reserve Experience\nExcluding Charles Hamlin, the first Fed Chair, 9 of the 14 Fed Chairs had prior experience at the Fed\u2019s Board of Governors or one of the 12 regional Federal Reserve Banks. Alan Greenspan (1987-2006) was the most recent Fed Chair with no previous Fed experience.\nFederal Policymaking Experience\nAll 15 Fed Chairs had prior federal government policymaking experience, including at the Fed. Figure 1 shows that 12 (and all since 1934) had previous policymaking experience outside the Fed, most commonly with the Treasury Department (including the Office of the Comptroller of the Currency) or the Council of Economic Advisers (CEA).\nFigure 1. Executive Branch Experience of Fed Chairs\n/\nSource: Congressional Research Service (CRS) using data from Federal Reserve History webpage, congressional nomination hearings, obituaries, and Marquis Who\u2019s Who.\nNote: Some Chairs who had previously worked at the Council of Economic Advisers (CEA) and Treasury Department also had other executive branch experience.\nPrivate-Sector Experience\nAll of the Fed Chairs previously worked in the private sector, including academia. As seen in Figure 2, their experience varied. Eight worked in the financial sector, most commonly at banks. Five of the last six Chairs (excluding G. William Miller) worked as economists in academia or the private sector; none of the first nine Chairs worked as economists. Among noneconomists, seven were financial-sector executives (e.g., bank presidents) and two were nonfinancial-sector business executives in their most recent private-sector experience prior to becoming Fed Chairs. Several worked as lawyers, but only one had no private-sector experience outside of the law.\nFigure 2. Selected Private-Sector Experience of Fed Chairs\n/\nSource: CRS using data from Federal Reserve History webpage, congressional nomination hearings, obituaries, and Marquis Who\u2019s Who.\nEducational Background\nThe last three Fed Chairs have been PhD economists, but this was rare before then. As shown in Figure 3, the most common educational attainment among previous Chairs was a law degree. Before 1970, some previous Chairs\u2019 highest educational attainment was a bachelor\u2019s degree or high school diploma, respectively.\nFigure 3. Highest Educational Attainment of Fed Chairs\n/\nSource: CRS using data from Federal Reserve History webpage, congressional nomination hearings, obituaries, and Marquis Who\u2019s Who.", "type": "CRS Insight", "typeId": "INSIGHTS", "active": false, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN10796", "sha1": "9739bab1a5c47e691a909bd54a0c10feb6975e10", "filename": "files/20171004_IN10796_9739bab1a5c47e691a909bd54a0c10feb6975e10.html", "images": { "/products/Getimages/?directory=IN/ASPX/IN10796_files&id=/1.png": "files/20171004_IN10796_images_8f427cbac4d447c253f813c1efeb318d5e5ca564.png", "/products/Getimages/?directory=IN/ASPX/IN10796_files&id=/2.png": "files/20171004_IN10796_images_226e9f6b79590cb26473c8f582339a6518361f93.png", "/products/Getimages/?directory=IN/ASPX/IN10796_files&id=/0.png": "files/20171004_IN10796_images_96c56c529be429f46ee0704d2d9c32ef36f4dd31.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/IN10796", "sha1": "5d3a0e045a0f88941060c194aa8bb9a198583d8e", "filename": "files/20171004_IN10796_5d3a0e045a0f88941060c194aa8bb9a198583d8e.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4891, "name": "Federal Reserve & Monetary Policy" } ] } ], "topics": [ "CRS Insights" ] }