Mr. Merkley had patchy cellphone reception at the Pendleton Round-Up, a rodeo in eastern Oregon. Mr. McDonough was dealing with other business and could not be reached, so Senator Merkley left a message with his staff.
That spotty phone call — reflecting the revolt of a number of prominent Democrats, many of them from the liberal wing of the party, but not limited to it — helped to seal Mr. Summers’s fate. Not even an official nominee yet, Mr. Summers, a former Treasury secretary under President Bill Clinton and a key architect of Mr. Obama’s economic stimulus program, faced long odds in winning Senate confirmation. On Sunday, Mr. Summers pulled out of contention, citing a potentially “acrimonious” battle that could harm the economy and Mr. Obama’s presidency.
Senate Democrats did not “want the fight,” said one Congressional aide, speaking on condition of anonymity. “They don’t want another fight that divides Democrats, and brings back to the forefront a bunch of the issues we dealt with during the crisis and the bailout.”
The aide continued: “And they don’t want to spend the political capital to get this guy through.”
Ultimately, they got their way.
In its search for a new Fed chairman, the White House had for months centered on Mr. Summers, who smarted after being passed over for the position when Mr. Obama decided four years ago to name Ben S. Bernanke to a second term as chairman. This time, with Mr. Obama determined to replace Mr. Bernanke after eight years in office, the White House has weighed other candidates, including Janet L. Yellen, the Fed’s vice chairwoman, and Donald L. Kohn, a former Fed official. But many top economic policy officials in the administration considered Mr. Summers, who worked intimately with them during the financial crisis, by far the best candidate.
The White House assigned Rob Nabors, a deputy chief of staff, to work with him, and recruited two former campaign consultants, Jim Messina and Stephanie Cutter, to talk him up to the press.
But a number of Senate Democrats, rather than waiting for the nomination process to play itself out, raised concerns as soon as his name surfaced this summer: his reputation for being a divisive colleague, his perceived role in coddling Wall Street and the lax regulation of derivatives, and complaints that he did not support smaller community banks as much as the nation’s giant financial institutions, among other issues.
In July, those senators strongly signaled to the White House that they preferred Ms. Yellen. Senator Sherrod Brown of Ohio drafted and circulated a letter of support for her, which 20 colleagues signed, including Richard J. Durbin of Illinois, the No. 2 Democrat. “It wasn’t a subtle maneuver,” one aide said.
A diffuse group of Democratic senators opposed to Mr. Summers’s nomination might not have scuttled it. But the lawmakers were concentrated on the banking committee, where Fed candidates must win a majority vote before they can go for a full Senate confirmation. The senators and staff members on the committee batted around the pros and cons of Mr. Summers for weeks, at times airing their concerns with a White House that some officials described as receptive and some as dismissive.
After returning from the long Congressional summer recess, Mr. Merkley made an attempt to parse out his colleagues’ positions on Mr. Summers during caucus lunches. He found that as many as four were opposed to, or queasy about, the potential nomination.
Mr. Merkley and Mr. Brown were strong no votes. Senator Elizabeth Warren of Massachusetts had misgivings and preferred Ms. Yellen, though her colleagues were not sure how she would vote in committee.
In time, two more senators admitted their concerns. Jon Tester of Montana decided he would oppose Mr. Summers. And Heidi Heitkamp of North Dakota expressed some misgivings about Mr. Summers, a Senate aide confirmed, though those concerns were never aired in public.
The Senate Banking Committee consists of 12 Democrats and 10 Republicans. Every Democrat in the no column would have to be balanced with a yes vote from a Republican to win the support of the committee. By Mr. Merkley’s count, Mr. Summers might have needed as many as five Republican votes.
For the White House, that would have left two options, Senate aides said, both unpalatable. The first would have been to lean on the Democratic “no” votes, asking members to agree to pass Mr. Summers out of committee even if they intended to vote against him on the Senate floor. But the White House had not laid the groundwork for such a strategy. Some Democratic offices had not heard from White House representatives about the nomination at all.
The second option would have been to barter for Republican votes. Aides described that strategy as possible: many Republicans would have been willing to vote for Mr. Summers, they said, for a price. But handing the Republicans leverage in the midst of the debt ceiling and budget debates would have weakened the White House’s hand.
White House advisers, including Mr. McDonough and Valerie Jarrett, were opposed to any such trade-offs. Mr. Summers, with his own well-honed political antenna, picked up the signals from Washington.
Ms. Yellen has again become the presumptive front-runner, as she had been for much of the spring. Senate Democrats, for their part, have made their thoughts on her known. Despite lukewarm Republican support, she would almost certainly sail out of committee and clear a full Senate confirmation vote, too.
“I don’t think it’s any secret that Larry was not my first choice,” Senator Warren said in an interview on MSNBC on Monday. “I think the president is taking his time, he’s thinking through this and we’re having a good and thoughtful discussion, which is a good thing to have in Washington.”
Jeremy W. Peters and Binyamin Appelbaum contributed reporting.
Article source: http://www.nytimes.com/2013/09/17/business/democrats-saw-summerss-fed-nomination-as-too-costly-in-political-capital.html?partner=rss&emc=rss