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The Hill
a day ago
- Business
- The Hill
Powell defends Fed renovation amid Trump criticism
Federal Reserve Chair Jerome Powell on Thursday pushed back on GOP criticisms regarding renovation costs for two buildings in Washington, suggesting the upgrades are overdue. 'The project is large in scope because it involves the renovation of two historic buildings on the National Mall and that were first constructed in the 1930s,' Powell wrote in a Thursday letter to Office of Management and Budget (OMB) Director Russell Vought. 'While periodic work has been done to keep these buildings occupiable, neither building has seen a comprehensive renovation since they were first constructed.' 'Both buildings were in need of significant structural repairs and other updates to make the buildings safe, healthy, and effective places to work, including the removal of asbestos and lead contamination, complete replacement of antiquated systems such as electrical, plumbing, heating, ventilation, and air conditioning, as well as fire detection and suppression systems,' he added. Trump administration officials have hammered Powell in recent weeks over his refusal to lower interest rates amid tariff uncertainty. Vought, earlier this month, questioned the Fed chair's leadership while claiming the projects in question were mismanaged resulting in a tab 'roughly $700 million over its initial cost.' 'While continuing to run a deficit since FY23 (the first time in the Fed's history), the Fed is way over budget on the renovation of its headquarters,' he wrote in a July 10 post on social platform X. 'Now up to $2.5 billion, roughly $700 million over its initial cost,' the OMB director added. He also noted that the perceived discrepancies require 'additional oversight' by his office and the National Capital Planning Commission. Powell countered the argument, saying the central bank already received feedback and approval from NCPC on the project proposals submitted in 2020 and 2021. 'Although the Board is not generally subject to the direction of NCPC with respect to its building projects, we voluntarily collaborated with the NCPC and benefitted from robust and collaborative engagement with the commission in earlier stages of the project,' he wrote in his letter to Vought. 'The project is proceeding in accordance with the plan that the NCPC approved in September 2021. Since the plan's approval by the NCPC, the Board has made a small number of design changes to scale back or eliminate certain elements and has added no new elements,' the Fed chief continued. 'These changes were intended to simplify construction and reduce the likelihood of further delays and cost increases.' The back-and-forth comes as President Trump has threatened to ' soon ' fire Powell over his refusal to lower interest rates, with the idea floated that he could replace him with Treasury Secretary Scott Bessent. However, some lawmakers have raised concerns with such a move, citing a potential impact on the markets. 'I do not believe a president, any president, has the authority to fire the Federal Reserve chair,' said Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, which has jurisdiction over the Fed. 'I believe strongly in the independence of the Federal Reserve. Some countries in the world don't have independent central banks,' he continued. 'Ask Turkey how that's been working out for them. At one point Turkey had inflation at 30 percent.' Sen. Thom Tillis (R-N.C.), another member of the Banking Committee, has also warned that firing Powell would send a 'shock wave' through the economy. 'It would be a colossal mistake,' he said.
a day ago
- Business
Federal Reserve says building renovation complies with law, defends costs
WASHINGTON -- Federal Reserve Chair Jerome Powell on Thursday said the agency's renovation of two of its buildings is in compliance with plans approved by a local commission, disputing a White House suggestion that they may have violated the law by deviating from those plans. The letter is the lastest salvo in an escalating battle between the Federal Reserve, an independent agency charged with fighting inflation and seeking maximum employment, and the Trump administration. President Donald Trump has for months criticized Powell and the Fed for not lowering its key interest rate, which the president says would boost borrowing and accelerate the economy. Powell has said he wants to see how the economy responds to Trump's sweeping tariffs, which could raise inflation and slow growth, before making any moves. Trump has even threatened to fire Powell, though he has since backed away and said Wednesday it was 'highly unlikely' that he would take the unprecedented step of doing so. Firing the Fed chair could cause chaos in the financial markets. Several executives of Wall Street banks have said this week that the Fed's independence from day-to-day politics is crucial. Still, the Trump administration has seized on ballooning costs for the Fed's renovation of two century-old buildings to argue that Powell has mismanaged the project. The president can't fire the Fed chair because of a policy disagreement, but he could do so 'for cause,' which is widely seen as some kind of malfeasance or neglect. Last week, the president's top budget adviser, Russell Vought, wrote Powell a letter that said Trump is 'extremely troubled' by Powell's management of the project, which has risen in cost to about $2.5 billion, up from the Fed's initial estimate of $1.9 billion. Vought's letter also noted that Powell, in testimony before the Senate last month, said that the Fed removed some amenities that critics called ostentatious from its plans. Those plans had been approved by the National Capital Planning Commission in 2021. Vought said in his letter that if the renovation plans had changed, they were no longer 'in compliance with the approved plan" and may violate the National Capital Planning Act. Powell responded Thursday that since the Fed's plans were approved by the NCPC in September 2021, it has made only 'a small number of design changes to scale back or eliminate certain elements' and added that the changes weren't significant enough to 'warrant... further review.' 'The project is proceeding in accordance with the plan that the NCPC approved,' Powell wrote. The changes were intended 'to simplify construction and reduce the likelihood of further delays and cost increases,' Powell said in his letter. Powell also defended the cost of the renovation: 'Both buildings were in need of significant structural repairs,' including 'the removal of asbestos and lead contamination,' as well as the 'complete replacement of antiquated systems such as electrical, plumbing, heating, ventilation and air conditioning, as well as fire detection and suppression systems,' he wrote.
Yahoo
a day ago
- Business
- Yahoo
Federal Reserve says building renovation complies with law, defends costs
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell on Thursday said the agency's renovation of two of its buildings is in compliance with plans approved by a local commission, disputing a White House suggestion that they may have violated the law by deviating from those plans. The letter is the lastest salvo in an escalating battle between the Federal Reserve, an independent agency charged with fighting inflation and seeking maximum employment, and the Trump administration. President Donald Trump has for months criticized Powell and the Fed for not lowering its key interest rate, which the president says would boost borrowing and accelerate the economy. Powell has said he wants to see how the economy responds to Trump's sweeping tariffs, which could raise inflation and slow growth, before making any moves. Trump has even threatened to fire Powell, though he has since backed away and said Wednesday it was 'highly unlikely' that he would take the unprecedented step of doing so. Firing the Fed chair could cause chaos in the financial markets. Several executives of Wall Street banks have said this week that the Fed's independence from day-to-day politics is crucial. Still, the Trump administration has seized on ballooning costs for the Fed's renovation of two century-old buildings to argue that Powell has mismanaged the project. The president can't fire the Fed chair because of a policy disagreement, but he could do so 'for cause,' which is widely seen as some kind of malfeasance or neglect. Last week, the president's top budget adviser, Russell Vought, wrote Powell a letter that said Trump is 'extremely troubled' by Powell's management of the project, which has risen in cost to about $2.5 billion, up from the Fed's initial estimate of $1.9 billion. Vought's letter also noted that Powell, in testimony before the Senate last month, said that the Fed removed some amenities that critics called ostentatious from its plans. Those plans had been approved by the National Capital Planning Commission in 2021. Vought said in his letter that if the renovation plans had changed, they were no longer 'in compliance with the approved plan" and may violate the National Capital Planning Act. Powell responded Thursday that since the Fed's plans were approved by the NCPC in September 2021, it has made only 'a small number of design changes to scale back or eliminate certain elements' and added that the changes weren't significant enough to 'warrant... further review.' 'The project is proceeding in accordance with the plan that the NCPC approved,' Powell wrote. The changes were intended 'to simplify construction and reduce the likelihood of further delays and cost increases,' Powell said in his letter. Powell also defended the cost of the renovation: 'Both buildings were in need of significant structural repairs,' including 'the removal of asbestos and lead contamination,' as well as the 'complete replacement of antiquated systems such as electrical, plumbing, heating, ventilation and air conditioning, as well as fire detection and suppression systems,' he wrote.
New York Post
2 days ago
- Business
- New York Post
Jerome Powell defends $2.5B Federal Reserve renovation: ‘Good stewards of public resources'
WASHINGTON — Federal Reserve chairman Jerome Powell defended his $2.5 billion headquarters renovation project near the National Mall Thursday — insisting that 'we take seriously the responsibility to be good stewards of public resources.' 'We have taken great care to ensure the project is carefully overseen since it was first approved by the Board in 2017,' Powell claimed in a letter to White House director of management and budget Russ Vought, even though the project is already about $600 million over budget Powell has faced a firestorm of Republican criticism over the lavish renovation — as President Trump demands that Powell consider resigning after refusing to lower interest rates. Advertisement The renovation project has given Trump and his allies a way to pressure Powell to either relax interest rates or resign under the weight of multiple investigations. 5 Federal Reserve chairman Jerome Powell described himself as a good steward of public resources Thursday. AP 5 President Trump has pressured Powell to resign after he refused to lower interest rates. Aaron Schwartz/POOL via CNP/ Advertisement Prominent Republicans this month said Powell, in office since 2018, could be prosecuted for allegedly lying to a Senate committee about luxury features including private VIP dining rooms and an outdoor terrace. Vought last week raised the prospect that Powell broke a different law if he told the truth to senators by virtue of making major changes without approval from the National Capital Planning Commission — setting up an apparent Catch-22 for the Fed chief. 5 The $2.5 billion construction project on the Fed's headquarters is only of the most costly US building projects ever. Getty Images Powell's reply to Vought seeks to absolve him of both perjury and illicit alterations by arguing he was honest with Congress and that changes were so minor they didn't require approval. Advertisement 'This information supports and further elaborates on my testimony of June 25, 2025, before the Senate Committee on Banking, Housing, and Urban Affairs,' Powell wrote. 'The project is large in scope because it involves the renovation of two historic buildings on the National Mall and that were first constructed in the 1930s… Both buildings were in need of significant structural repairs and other updates to make the buildings safe, healthy, and effective places to work.' Powell wrote 'the project is proceeding in accordance with the plan that the NCPC approved in September 2021. Since the plan's approval by the NCPC, the Board has made a small number of design changes to scale back or eliminate certain elements and has added no new elements.' 5 Powell argues he didn't lie to Congress or make illicit changes to approved plans. Getty Images Advertisement 'These changes were intended to simplify construction and reduce the likelihood of further delays and cost increases,' Powell argued. 'Guidance from the NCPC states that agencies should submit revised project information for approved projects only if substantial changes are made in either the design or plan of the project after NCPC review. The Board does not regard any of these changes as warranting further review.' Last month, Powell denied that the renovation amounted to a wasteful vanity project. 'There's no VIP dining room, there's no new marble. There are no special elevators,' Powell testified. 'There are no new water features, there's no beehives, and there's no roof terrace gardens.' Planning documents had called for each of those features. 'There are no VIP dining rooms being constructed as part of the project,' Powell wrote to Vought. 'The Eccles Building has historic multi-use rooms on the 4th Floor that are used as conference rooms and for mealtime meetings. These rooms are being renovated and preserved,' he wrote. 5 White House budget director Russ Vought told reporters Thusday that he and other official are demanding a site inspection. Getty Images Advertisement 'The Eccles and 1951 Constitution Avenue Buildings were originally built with marble in the façades and stonework,' he added. 'The project has salvaged the original exterior marble to be reinstalled and will use new domestic marble sourced from Georgia in places where the original was damaged or where needed to keep with historic preservation guidelines and to address concerns raised by external review agencies.' Powell went on: 'There are no special, private, or VIP elevators being constructed as part of the project. The original elevators of the Eccles Building are being rehabilitated, including an elevator that services historic conference rooms.' 'Although the Board's initial design included new water features for the 1951 Constitution Avenue building, they have been eliminated,' he wrote. 'Fountains that were original to the Eccles building are being restored.' Advertisement Powell also argued that a 'garden terrace' described in documents was actually a 'green roof' that's 'found on other federal government buildings.' The construction project is likely to continue to be a flashpoint as senior White House officials including Vought demand a site visit and critics claim it will rival the Palace of Versailles in inflation-adjusted construction costs. Powell has incurred Trump's wrath for refusing to lower interest rates this year despite inflation falling below 3%. The chairman argues that Trump's looming tariffs require restraint, keeping high the cost of loans for businesses, homebuyers, and consumers with car leases or credit balances. Trump last week stacked the five-member National Capital Planning Commission with three allies — his staff secretary Will Scharf, White House deputy chief of staff James Blair and OMB official Stuart Levenbach — in a further move to increase pressure. A Federal Reserve spokesperson said that they have no information to share on a possible site inspection.
San Francisco Chronicle
2 days ago
- Business
- San Francisco Chronicle
Federal Reserve says building renovation complies with law, defends costs
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell on Thursday said the agency's renovation of two of its buildings is in compliance with plans approved by a local commission, disputing a White House suggestion that they may have violated the law by deviating from those plans. The letter is the lastest salvo in an escalating battle between the Federal Reserve, an independent agency charged with fighting inflation and seeking maximum employment, and the Trump administration. President Donald Trump has for months criticized Powell and the Fed for not lowering its key interest rate, which the president says would boost borrowing and accelerate the economy. Powell has said he wants to see how the economy responds to Trump's sweeping tariffs, which could raise inflation and slow growth, before making any moves. Trump has even threatened to fire Powell, though he has since backed away and said Wednesday it was 'highly unlikely' that he would take the unprecedented step of doing so. Firing the Fed chair could cause chaos in the financial markets. Several executives of Wall Street banks have said this week that the Fed's independence from day-to-day politics is crucial. Still, the Trump administration has seized on ballooning costs for the Fed's renovation of two century-old buildings to argue that Powell has mismanaged the project. The president can't fire the Fed chair because of a policy disagreement, but he could do so 'for cause,' which is widely seen as some kind of malfeasance or neglect. Last week, the president's top budget adviser, Russell Vought, wrote Powell a letter that said Trump is 'extremely troubled' by Powell's management of the project, which has risen in cost to about $2.5 billion, up from the Fed's initial estimate of $1.9 billion. Vought's letter also noted that Powell, in testimony before the Senate last month, said that the Fed removed some amenities that critics called ostentatious from its plans. Those plans had been approved by the National Capital Planning Commission in 2021. Vought said in his letter that if the renovation plans had changed, they were no longer 'in compliance with the approved plan" and may violate the National Capital Planning Act. Powell responded Thursday that since the Fed's plans were approved by the NCPC in September 2021, it has made only 'a small number of design changes to scale back or eliminate certain elements' and added that the changes weren't significant enough to 'warrant... further review.' 'The project is proceeding in accordance with the plan that the NCPC approved,' Powell wrote. The changes were intended 'to simplify construction and reduce the likelihood of further delays and cost increases,' Powell said in his letter. Powell also defended the cost of the renovation: 'Both buildings were in need of significant structural repairs,' including 'the removal of asbestos and lead contamination,' as well as the 'complete replacement of antiquated systems such as electrical, plumbing, heating, ventilation and air conditioning, as well as fire detection and suppression systems,' he wrote.
