WASHINGTON -- Alan Blinder was sworn in yesterday as vice chairman of the Federal Reserve Board, becoming President Clinton's first appointee on the seven-member board.
Blinder, 48, was sworn in at a private ceremony in the board room of the Fed's main offices on Independence Avenue by Chairman Alan Greenspan, a Fed spokesman said. The event followed the board's regular weekly meeting and was attended by Blinder's wife, Madeline, other board members, and senior Fed staff.
Blinder, who served under Clinton on the President's Council of Economic Advisers, will be eligible to vote at the July 5 and 6 meeting of the Federal Open Market Committee. He succeeds David Mullins, who resigned, to fill a position that runs until Jan. 31, 1996.
The Senate unanimously approved Blinder's nomination late Friday. The Senate Banking Committee has still not scheduled a hearing yet on Janet Yellin, Clinton's other choice to fill a vacancy at the Fed.
There has been speculation in the bond market that Clinton will ask Blinder to serve as Fed chairman after Greenspan's term expires March 2, 1996. However, Blinder said he never discussed the idea with Clinton. Moreover, past presidents have preferred to pick a chairman from outside the central bank.
In a separate development, House Banking Committee Chairman Henry Gonzalez, D-Tex., protested plans by the Fed to compete against private bidders to run the Treasury Department's electronic federal tax payment system. The system is being set up to process corporate tax payments that are now made on paper.
"The Federal Reserve and the Treasury are so interdependent that it is impossible for them to have the same arm's-length relationship that would exist with any other bidder," Gonzalez said in a letter sent yesterday to Treasury Secretary Lloyd Bentsen.
Gonzalez said the Fed "had a hand" in designing the request for proposals to develop the new system that the Treasury sent out to the public, creating a "clear conflict of interest."
A Treasury spokesman confirmed that the department's financial management service is taking bids for an electronic system to collect withholding taxes from employers. But, the spokesman said, the department would have no further comment until officials review the letter from Gonzalez. A Fed spokesman had no Comment.