Larry Summers, the former head of President Obama's Economic Council, withdrew his name for consideration to be the next chairman of the Federal Reserve Sunday. His decision potentially paves the way for Janet Yellen to become the first woman Fed Chair.
"Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today," President Obama said in a statement Sunday. "I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future."
Democrats, led by Elizabeth Warren of Massachusetts, had criticized Summers' role in the financial crisis, arguing that the deregulation of the financial sector while Summers served as Treasury Secretary under President Bill Clinton was in part responsible for the meltdown.
As president of Harvard University, Summers came under fire for saying that "innate" differences between men and women accounted for the under-representation of women in the sciences.
Yellen, the current vice chairman of the Fed Board of Governors, had the vote of confidence from more progressive supporters, including Robert Reich, the former Secretary of Labor under President Clinton.
"Janet Yellen understands that good jobs at good wages are good for the economy, and an omnipotent Wall Street isn't," Reich tweeted Sunday.
In a letter to the president obtained by NBC News, Summers said it had been a "privilege" to work with Obama to lead the country out of recession during his first administration, before adding:
This is a complex moment in our national life. I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation's ongoing economic recovery.