Senator Elizabeth Warren has told the White House that she won't publicly take a position on Larry Summers as a possible chairman of the Federal Reserve Board, though she privately told administration officials she has "serious concerns" about him as a nominee, according to people familiar with the situation.
Summers's prospects have dimmed over the past week and the Obama administration has come to realize the opposition of a prominent figure such as Warren could deliver a fatal blow, several people said.
Like most freshman senators, Warren has minimal influence with colleagues on most issues; the exception could be a Fed nomination, given her extensive background as a critic of Wall Street and big banks. In addition, Summers, a former Treasury secretary and top economic adviser to President Barack Obama, must get the support of the vast majority of Senate Democrats to win confirmation.
Warren, a Massachusetts Democrat, is caught between her views about the perils of too-big-to-fail banks and the need for tougher financial regulation (in some cases, at variance with Summers's positions and record) and her desire to support the president.
Obama hasn't announced his choice to succeed Ben Bernanke whose term as chairman of the central bank expires next January. The leading contenders for the job are Summers and Fed Vice Chairman Janet Yellen. The president is thought to prefer Summers, though there is little indication that the White House has done a serious vote count to determine whether he could muster the 60 votes necessary to overcome opposition in the Senate.
A nomination could be announced soon. But any ensuing fight could get mixed up with the battles over the debt ceiling and deficit, as well as the debate over the response to Syria's use of chemical weapons.
White House officials privately have predicted Summers would win Senate confirmation because even if a handful of Democrats defected, the nominee would have sufficient Republican supporters, who would be swayed by financial interests that would back Summers.
That might be a miscalculation. Yesterday, Senator John Cornyn of Texas, the second-ranking Republican in the Senate, told the Huffington Post that he would oppose a Summers nomination. Although some economists say Yellen would be a little more liberal on regulation and monetary policy, Summers, with his close involvement in Democratic politics and policies over the past two decades, would raise more suspicion among the Republican Party's right wing base.
Warren will deliver a speech next week, the anniversary of the 2008 financial crash, on the too-big-to-fail controversy among other issues. One person familiar with the issue said that if Summers is tapped, Warren, a member of the Senate Banking Committee would grill him on these matters, but could vote for him if he provided adequate answers to tough questions. Others said an affirmative vote is very unlikely.
Summers and Warren were colleagues at Harvard University when he was president of the university and she was on the law school faculty. They weren't close.
(Albert R. Hunt is a Bloomberg View columnist. Follow him on Twitter.)