Editorial: Senate must stand against abuse of power

Kevin Warsh is headed for confirmation by the U.S. Senate as the head of the Federal Reserve now that the Senate Banking Committee approved his nomination. Warsh, a Trump loyalist, threatens the central bank's independence, but the story of his ascension illustrates both frightening presidential abuse of power and the importance of standing against it.

Donald Trump made no secret that he believes the Fed, which includes setting monetary policy among its responsibilities, should lower interest rates. The president rightly believes that a lower borrowing cost would give the economy — and his political standing — a boost. But he neglects the long-term side effects of a quick high.

Lower interest rates may spark growth by stimulating spending and investment, but they can also increase inflation as demand climbs. More importantly, trust in the U.S. financial system depends on an independent Fed able to make decisions free from political interference.

Trump is far from the first president to disagree with the way the Fed is handling interest rates. However, his pressure campaign against the central bank's board and its current chairman, Jerome Powell, has grown into using the power of the federal government to bully and coerce.

When the U.S. Department of Justice opened an investigation into Powell over charges that he lied to Congress regarding the renovation of the Federal Reserve's headquarters in Washington, Powell, whose term as chair ends Friday, bluntly expressed why he believed he was targeted.

"This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation," he said.

Fortunately, in this case, political pressure cut both ways, as North Carolina Republican Thom Tillis, who sits on the Senate Banking Committee, made clear he would not support Trump's nominee for Fed chair if there was an open investigation against Powell.

The gambit worked, and the DOJ probe was dropped on April 24.

While Tillis is not seeking reelection and can risk Trump's wrath, his actions should remind his congressional colleagues that when the president abuses his power, they have power themselves to push back.

Nowhere will this be more crucial than in the Senate confirmation of the next attorney general.

While Trump has so far failed to politicize the Federal Reserve, he has had no difficulty with the Justice Department. Under former Attorney General Pam Bondi, prosecutors pursued politically motivated cases against former FBI Director James Comey, U.S. Sen. Adam Schiff, former CIA Director John Brennan and New York Attorney General Letitia James, among others.

While the president has yet to nominate a replacement, acting Attorney General Todd Blanche seems intent on not repeating Bondi's mistake. In less than a month on the job, Blanche's DOJ has brought cases against David Morens, a former senior adviser to Trump foil Anthony Fauci, the Southern Poverty Law Center and Comey, again.

Tillis, who also sits on the Senate Judiciary Committee, has indicated he has serious doubts about Blanche. That is heartening, but he should not be the only Republican willing to rein in an out-of-control administration.

Whether it is Blanche or some other Trump sycophant, senators must defend the independence of the Department of Justice and remind the White House that the attorney general represents the people, not the president.