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Senate Republicans have an increasingly clear message for the Trump administration: If the president wants a new Federal Reserve chair, federal prosecutors need to drop their investigation into Jerome Powell.
A movement that began with retiring Sen. Thom Tillis, R-N.C, staking his last year in office on defending Fed independence, has been quietly gaining steam among fellow Republicans who want to install nominee Kevin Warsh as soon as possible. With Powell’s term as chair ending next month, GOP lawmakers are becoming more forthright in their opposition to the probe — even if Tillis is still the only one threatening a “no” vote.
“One thing all martyrs have in common: They’re dead,” Tillis said following Warsh’s Tuesday hearing, where Tillis showed up with props to make his case for DOJ butting out.
“If I’m able to do it and keep the outcome, why should we do anything more than the minimum number of members necessary to accomplish the goal?” Tillis said. “Why would we expose other people to the discourse?”
US Attorney Jeanine Pirro also doubled down Wednesday, telling reporters that her investigation into the Fed’s ongoing renovations — and Powell’s testimony on them — “continues.” President Donald Trump himself had told CNBC Tuesday that officials “have to find out” if Powell “is taking money.” Powell has said he will stay past the end of his term as chair if senators haven’t confirmed Warsh.
Amid the stalemate, Tillis’ GOP colleagues are increasingly signaling their support for an offramp — “any offramp,” per Sen. Bill Hagerty, R-La. — that might allow them to confirm Warsh (not to mention keep investors calm) before Powell’s term as chair ends next month. Publicly and privately, they’re hitting one thing hard: For Warsh to move into the chair position, the Justice Department probe has to go.
“We don’t want, obviously, cost overruns and so on and so forth — and so I think that [oversight] is going to continue with the [inspector general],” Sen. John Hoeven, R-N.D., told Semafor. “But at least as far as the issue with Powell, I think it’d be good if we could get that wrapped up, from the standpoint of getting Warsh in there and moving on.”
Hoeven, who doesn’t serve on the Senate Banking Committee, isn’t making that case directly to administration officials. Others are.
“I’d like to see the president get his chairman; I think the best way to do that is finding an off-ramp that takes care of the issue and we get rid of the criminal investigation and we perhaps offer an alternative” like a committee investigation, said Sen. Mike Rounds, R-S.D., who told Semafor that he’s spoken to “people within the administration” who “are involved in the nomination process.”
His message: “This needs to be resolved in order to move this nomination forward” and Congress will “assist wherever we can.”
White House spokesperson Kush Desai said it “continues to work with the Senate to ensure his swift confirmation.”
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A number of GOP senators began signaling their frustration with Pirro’s probe last month. Tillis had previously indicated that other congressional Republicans supported his stance, even if they couldn’t say so publicly.
Warsh and his team met with Senate Majority Leader John Thune, R-S.D., Wednesday. Thune suggested after that the Senate Committee on Homeland Security and Governmental Affairs could investigate the renovation alongside the Fed inspector general and the Senate Banking Committee.
“You’ll see plenty of oversight being done,” Thune told reporters.
Tillis told Semafor this week he is “constantly” in contact with Treasury Secretary Scott Bessent, who suggested in February that the Senate Banking Committee could investigate the renovations instead of DOJ. Tillis and Scott made similar pitches Tuesday.
Asked about it Wednesday, Tillis said he was “hopeful that we can get DOJ just to drop the investigation.”
Room for Disagreement
There’s a faction of Senate Republicans who don’t think Pirro should scrap her investigation into Powell. Among them: Sen. Cynthia Lummis, who posited Wednesday that Pirro’s team could “have evidence that we haven’t seen.”
“Because I don’t know if they have a case, I am not in a position to say” they should give it up, the retiring Wyoming Republican told Semafor. “Just because I don’t see it doesn’t mean it doesn’t exist.”
She and Sen. Bernie Moreno, R-Ohio, have voiced annoyance over Tillis’ campaign. The latter dismissed the idea of a committee investigation Wednesday as “a lot of inside baseball.”
“My focus is: We really need to get him in there,” Moreno told Semafor.
Eleanor’s view
If you wrote the movie Groundhog’s Day about the Fed, it would look a lot like this new cycle: Tillis doesn’t budge; neither do Trump or Pirro; concerned GOP bystanders seek to underscore that the best resolution is finding some other way to look into an over-budget construction project.
But the longer it drags on (and the lower Trump’s poll numbers dip), the more forthright these lawmakers may become — and that could eventually build enough pressure to change the equation. In fact, the hardest part could be ensuring it doesn’t build too much.
“I’m not sure that Jeanine Pirro or Donald Trump respond well to pressure, so I want the diplomacy to work,” Sen. Kevin Cramer, R-N.D., said. “It deserves an investigation — just not a criminal one.”
Notable
White House National Economic Council Director Kevin Hassett told Bloomberg Wednesday that Powell’s plan to remain acting chair in the absence of a successor is “the appropriate legal understanding.”
Burgess Everett contributed to this report.