Republicans Plead With Trump to Drop Powell Probe

Senate Republicans are begging President Donald Trump to let go of the unprecedented investigation into cost overruns with the renovation at the Federal Reserve just a month before the end of Chairman Jerome Powell’s term.

The long-held rivalry hit a new flashpoint Wednesday after the president said again he would fire Powell should he remain on the Fed, creating a hellish upcoming month for senators as they attempt to work around the political landmine.

Republican lawmakers have been hopeful that the imbroglio would fade as the upper chamber moves ahead with Kevin Warsh’s nomination to succeed Powell. Much to their chagrin, that has not happened, and instead it’s escalated — leaving them with a fresh headache.

“I just want there to be peace in the valley. I want to have an orderly transition where the institution of the Federal Reserve is lifted up, not torn down. That’s my goal,” Sen. John Kennedy said. “How are we going to achieve that? I don’t have a solution right now, but I admire the hell out of the problem.”

Trump’s threat came after news emerged that Justice Department investigators on Tuesday attempted to gain access to the over-budget construction at the Fed’s headquarters.

Kennedy said he still needed to “digest” Trump’s remarks from earlier in the day. A vocal backer of the Fed’s independence, the Louisiana Republican said earlier this year that senators needed the DOJ investigation “like we need a hole in the head.”

Trump declined Wednesday to end the probe of the central bank led by U.S. Attorney for the District of Columbia Jeanine Pirro. In response, Sen. Thom Tillis — a member of the Senate Banking Committee, which controls the fate of Warsh’s nomination — held firm on his vow that he will not support advancing Trump’s pick until the investigation is dropped. By law, Powell would remain Fed chair after his term ends May 15 until a successor is in place; he could also remain as a Fed governor through 2028.

While no one else has gone as far as Tillis, there is a healthy appetite among the Republican conference to end the investigation. More than a half-dozen Senate Republicans on Wednesday told NOTUS that they would like to see it wrapped up, and the sooner the better.

“The simple solution would be to end the investigation,” said Sen. Kevin Cramer, a Banking Committee member who has been a Powell critic but has maintained the chairman is not a criminal.

“The timing’s perfect to wrap it up,” Cramer told NOTUS. “I don’t think there should be one second of time between the end of Jay Powell’s term and the beginning of Kevin Warsh’s. Anything that doesn’t have that as its goal is an unnecessary distraction. It seems like a lot of resources on something that doesn’t seem all that big of a deal.”

“If we were going to run an investigation on everybody that misleads Congress, we’d have to build a lot of prisons,” he added.

One of the president’s key economic allies said the same. Stephen Moore, a former Trump economic adviser, told NOTUS that Trump is right about the amount of money spent on renovations at the Fed, but acknowledged that the probe could delay Warsh’s confirmation.

“I guess at this point it would seem wiser to me to just get him out and make him yesterday’s news,” Moore said.

The Banking Committee is set to hold the confirmation hearing for Warsh, a former Fed governor, on Tuesday. Even Tillis has indicated he will support Warsh, but has shown no signs of backing down from his nomination hold.

The North Carolina senator told reporters that he has had no conversations on the topic with anyone in the administration except some legislative affairs officials, adding that he was dismayed by the appearance of DOJ officials at the construction site of the Fed’s renovation a day earlier.

“I don’t know what’s changed. It almost seems like they want to escalate, and I would suggest to them that’s a bad idea. … People can escalate till the cows come home. They can escalate for the next 263 days,” Tillis said, referring to his remaining time in office. “My position’s not going to change until their posture changes.”

Tillis added that he’s gotten widespread support from the financial community for his stand over the Fed’s independence.

“Does anyone have any idea what that would be like under President Warren?” he continued, referring to progressive Sen. Elizabeth Warren. “This has long-term consequences.”

Republican members indicated that they were unsure whether Trump was legally able to fire Powell after the end of his term, but indicated they were hopeful it would not get to that point.

Federal Judge James Boasberg had initially quashed a pair of subpoenas that were drawn up by Pirro’s office. That decision has been appealed.

Trump made his latest threat in an interview with Fox Business on Wednesday.

“Then I’ll have to fire him,” Trump told host Maria Bartiromo. “If he’s not leaving on time — I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial, you know. I want to be uncontroversial.”

“What they’ve done to that – so it is probably corrupt, but what it really is is incompetent,” he later said of the cost overruns. “And we have to show the incompetence of that.”

White House officials remained tight-lipped on Wednesday about how the potentially volatile issue would resolve itself, unwilling to say how they planned to address Tillis’ concerns while the investigation continued.

During the White House’s press briefing, Treasury Secretary Scott Bessent demurred when asked by a reporter if he will pressure Trump not to fire Powell.

“Look, I am confident that the process that we’ve laid out in terms of Kevin Warsh becoming the next Fed chair” will be successful, Bessent said, adding that Republicans on the Senate Banking committee are “aligned.”

“I am very optimistic that Kevin Warsh will be the chair of the Fed on time and that will be a moot point,” Bessent said.

One source who spoke with Pirro recently and is close to the White House told NOTUS that she was acting “on her own” to follow what she believed to be a legitimate line of inquiry.

That conflicts, in some ways, with word from one of Trump’s top economic officials, who said the probe kicked off at Trump’s behest.

Kevin Hassett, the White House’s top economist, told Axios that DOJ got involved because “the president wanted to investigate the cost overrun.”

Some senators say they’re hopeful to move on, as soon as they can get out of the morass that they’ve found themselves in. This controversy means there’s still a tricky stretch ahead for an orderly transition at the central bank.

“There’s a lot of energy this month,” said Sen. Mike Rounds, a Banking Committee member. “It’s too bad we can’t harness the energy for some more productive activity.”