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Now that Federal Reserve nominee Kevin Warsh is through his confirmation hearing, Senate Republicans are back to hoping they can nudge President Donald Trump into a compromise.
The Trump administration had thought the hearing might spur Sen. Thom Tillis to drop his opposition. But the retiring North Carolina Republican didn’t ask Warsh a single question Tuesday, instead using his time to reiterate why he’s still planning to stop Warsh’s nomination from advancing unless US Attorney Jeanine Pirro abandons her Trump-backed investigation into current Fed Chair Jerome Powell.
Tillis told Semafor after the hearing that he is “constantly” in contact with Treasury Secretary Scott Bessent, who privately suggested earlier this year that the Senate Banking Committee could probe the central bank’s renovation — instead of Pirro and her federal prosecutors.
“I’ve been saying I think it’s great,” as long as the Justice Department first drops its investigation, Tillis said. “Any subcommittees of jurisdiction, once a year, if we want an oversight hearing on capital projects — I think it’d be a great idea.”
He’s not the only Senate Republican rooting for that kind of escape hatch from Pirro’s probe: Banking Chair Tim Scott, R-S.C., told CNBC he’d like to create “a special committee” that would “have permanent oversight of construction projects” under the panel’s jurisdiction. He and Tillis both suggested lawmakers could refer their findings to DOJ if appropriate.
Trump seemed to shut down that idea later Tuesday in his own CNBC interview. But the rest of the party now seems to have little recourse but to pray he reconsiders.
“The sooner we put the other stuff behind us, it allows us to move forward with confirmation,” Sen. Kevin Cramer, R-N.D., told Semafor.
Sen. Mike Rounds, R-S.D., was more blunt: “Get [the investigation] out of where it’s at right now, and get the criminal stuff behind us, and then let’s see if we can’t help the president get his person.”
“Maybe we can take on what [Tillis] suggested today, which is maybe do some oversight on the part of our committee with regard to the building structure, that basically none of us see as criminal in nature,” Rounds added. “If there was something found, we can always refer it.”
Cramer expressed optimism that administration officials “seem to be more down now” to examine cost overruns in the Fed’s renovation, which he called “an investigation that can continue apart from Jay Powell being under investigation for criminal charges”: “There are some opportunities to negotiate an off-ramp that provides winners all the way around.”
White House spokesperson Kush Desai said in a statement that “the White House continues to work with the Senate to ensure his swift confirmation.”
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Pirro has until May 3 to decide whether to appeal a judge’s decision to toss her subpoenas. But her probe may not die should she opt out, especially after a pair of her deputies made a surprise visit to the central bank’s construction site.
“This is just an investigation — and they don’t need the court’s permission to do an investigation, so they’ll be able to keep investigating whatever the court says,” said Vanderbilt University law professor Jeffrey Bellin, a former assistant US attorney for DC.
Tillis, who’s said repeatedly he will vote for Warsh once Pirro scraps the investigation, told reporters Tuesday “it could take five minutes” for her to do so. Other senators “are equally concerned,” he said later in the day. But Trump is signaling little interest in backing off Powell.
“I can’t imagine that ‘Too Late’ is taking money on construction, I can’t — but it’s possible,” Trump told CNBC. “We have to find out.”
Room for Disagreement
There remains a slim but real likelihood the Trump administration could try having it both ways, letting Pirro’s investigation into Fed renovations lapse for long enough to secure Tillis’ vote on Warsh — then restarting it later on.
Eleanor’s view
Compare Trump’s comments to those of senators, and it’s clear that the latter Republicans are mostly wishcasting. For now, Warsh’s nomination remains caught in the same congressional purgatory as Trump’s other economic policy goals, like bipartisan efforts on housing and cryptocurrency.
Lawmakers haven’t scheduled a committee vote on Warsh, and they probably won’t until something gives.
It is notable that more committee Republicans are floating the idea of a congressional investigation — this time, as something that could appease the president, rather than Tillis. But there’s no proof that Trump is any more interested in that tactic than he was when Bessent first raised it in February (as we first reported).
Notable
- During the hearing, senators were skeptical of Warsh’s contention that AI growth could help make the case for rate cuts, we reported.