GOP senator hints at “off-ramp” for Fed nominee after Powell probe
Republican Sen. Thom Tillis said he is open to a compromise that would allow the Senate Banking Committee to start hearings on Kevin Warsh, President Donald Trump’s nominee to chair the Federal Reserve, even as the Justice Department pursues a criminal investigation involving the Fed’s current chair, Jerome Powell. Tillis said the approach he has heard being discussed could become an “off-ramp,” referring to a pathway that might break the current stalemate over whether Warsh can be considered.
Tillis spoke Thursday after a meeting of Senate Republicans, and he said other senators at the meeting raised a proposal linked to Treasury Secretary Scott Bessent. In Tillis’s account of the discussion, the idea would involve shifting responsibility for looking into cost overruns connected to the Fed’s $2.5 billion renovation of two Washington, D.C., office buildings away from the Justice Department and toward the Senate Banking Committee.
The senator has previously signaled that he would not allow Warsh or other Trump nominees to move forward on the Fed until the Powell investigation is dropped. In comments last month on the Senate floor, Tillis reiterated that position, saying the inquiry should be settled before he supports any board member from moving through the banking committee for chair or for an expired term.
In Thursday’s remarks to reporters, Tillis framed his position as one that supports oversight and oversight tied to specific government spending. He said he supports having an investigation, but he said it should be accompanied by oversight for the East Wing construction project to help ensure it stays on schedule and does not go over budget. He also argued that the investigation threatens the Fed’s longtime independence from day-to-day politics.
Tillis’s views draw on a Justice Department matter that was revealed last month by Powell in a video statement that Tillis referenced in his own remarks. Powell said the investigation was part of an effort by the Trump administration to force the Fed to lower its key interest rate, and the Justice Department has subpoenaed Powell over comments he made about the building renovation during testimony before the banking committee last June.
On the Senate floor, Tillis also said “vindictive prosecution is wrong, period,” adding that the investigation’s circumstances could undermine the Fed’s independence. He said the case raises a broader budgeting question, telling lawmakers, “If we’re going to accuse someone of criminal behavior because of a project overrun in federal government, we better start budgeting a lot more for prisons,” in remarks quoted by the Associated Press.
At the Senate Republicans’ private retreat this week, the discussion included what Kennedy described as a concept raised by Bessent rather than a formal plan. Sen. John Kennedy said the idea of having the Senate Banking Committee take on the Powell investigation was more of a “trial balloon,” adding that Bessent raised the issue but did not recommend that it be pursued.
Tillis told reporters on Thursday that he supports Trump’s nomination of Warsh, saying Warsh “is a great nominee.” He also told the Senate floor that he had a list of seven GOP senators on the banking committee who did not think Powell committed a crime during his “two minutes of testimony” about the renovation project.