GOP senator says he's open to compromise on Trump’s nominee to chair the Federal Reserve

WASHINGTON (AP) — Republican Sen. Thom Tillis from North Carolina suggested Thursday he could support a compromise that would allow the Senate Banking Committee to start hearings on Kevin Warsh, President Donald Trump’s nominee to chair the Federal Reserve.

“What I heard being floated could be an off-ramp,” Tillis told reporters Thursday after a meeting of Senate Republicans. Treasury Secretary Scott Bessent has suggested that the banking committee, rather than the Justice Department, investigate cost overruns on the Fed’s $2.5 billion renovation of two Washington, D.C., office buildings, according to other senators at the meeting.

Tillis said last month that he would block any consideration of Warsh or any other Trump nominees to the Fed until the Justice Department drops a criminal investigation of Fed chair Jerome Powell over his testimony last summer about the renovation. Tillis on Thursday reiterated that view in comments on the Senate floor.

The investigation was revealed last month by Powell in an unusually blunt video statement, in which he said it was part of an effort by the Trump administration to force the Fed to lower its key interest rate. The Justice Department has subpoenaed Powell over comments he made about the building renovation during testimony before the banking committee last June.

“I will not allow any board member for the Federal Reserve to go through the banking committee, for chair or replacement of expired terms, until this matter is settled,” Tillis said.

“I have no problem with us having an investigation," he added, “like we should with so many other areas of government. I'd like to have oversight for the East Wing construction, to make sure that stays on target and doesn't go over budget.”

The Trump administration last year tore down the East Wing of the White House to add a large ballroom.

Tillis also said on the Senate floor that “vindictive prosecution is wrong, period," and added that the investigation threatened the Fed's longtime independence from day-to-day politics.

“If we're going to accuse someone of criminal behavior because of a project overrun in federal government, we better start budgeting a lot more for prisons,” Tillis said.

At the Senate Republicans’ private retreat this week they discussed Bessent’s idea of having the Senate Banking Committee take on the Powell investigation, said Sen. John Kennedy, R-La.

Kennedy described it as more of a “trial balloon” than a plan.

“All I heard was the Treasury Secretary thinking out loud, he raised the issue — he didn’t recommend it — he just raised it,” Kennedy said.

Tillis told reporters Thursday that he supports Trump's nomination of Warsh, who he said “is a great nominee.”

Tillis also said on the Senate floor that he had a list of seven GOP senators on the banking committee who did not think Powell committed a crime during his “two minutes of testimony” about the renovation project.

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Associated Press writer Lisa Mascaro contributed to this report.