Senate Banking Committee votes on Kevin Warsh Federal Reserve nomination
The Senate Banking Committee votes on Kevin Warsh's nomination as Federal Reserve Chair on April 29, with the vote set for 10 a.m. EDT.
Objective Facts
The Senate Banking Committee is expected on Wednesday to advance Kevin Warsh's nomination as Federal Reserve Chair to the full Senate, with a vote now set for 10 a.m. EDT. Sen. Thom Tillis announced Sunday he is willing to end his blockade of the nomination after the U.S. Department of Justice dropped its criminal investigation of Fed Chair Jerome Powell, giving Warsh a clear path to replace Powell when his term expires in mid-May. Tillis' vote is critical, as his defection would have deadlocked the 13-Republican, 11-Democrat committee. On April 29, Banking Democrats led by Elizabeth Warren sent a letter pressing Warsh to provide complete answers to questions about his evasive responses ahead of the committee vote. Warren stated Warsh proved in his nomination hearing to be nothing more than President Trump's sock puppet.
Left-Leaning Perspective
Sen. Elizabeth Warren, Ranking Member of the Senate Banking Committee, released a statement asserting either the Republican majority is fooled easily or hoping to fool the American people. Warren said in an early Saturday morning statement that the Justice Department only agreed to drop its probe of Powell to clear the way for Warsh's confirmation, and later stated no Republican claiming to care about Fed independence should support moving forward the nomination of Kevin Warsh, who proved in his nomination hearing to be nothing more than President Trump's sock puppet. Democratic senators including Warren, Jack Reed, Mark Warner, Chris Van Hollen, Raphael Warnock, Andy Kim, Ruben Gallego, and Lisa Blunt Rochester sent a letter to Warsh ahead of the Banking Committee markup on Wednesday requesting complete answers, stating he did not provide clear or complete responses to many of their questions which are critical to assessing how he would lead the Federal Reserve. Warren highlighted that Warsh declined to say whether Trump lost the 2020 election during his confirmation hearing, and economist Justin Wolfers stated he argues he's going to be an independent Fed chair but refuses to acknowledge that Trump lost the 2020 election. Democrats also pressed Warsh on his failure to adequately disclose details of his assets and his role as a primary architect of Wall Street bailouts during the 2008 financial crisis, noting he did not provide responses to questions about whether his actions were responsible for exacerbating the Too-Big-To-Fail problem or whether he downplayed subprime mortgages and incorrectly diagnosed risks posed by derivatives. Warren told reporters that after meeting with Warsh, the FBI made zero investigation into any of Warsh's financial holdings, including those he is refusing to disclose, and made zero investigation as to why Warsh appears in the publicly available Epstein files. Democrats omit sustained discussion of whether the DOJ's decision to move the Fed investigation to the Inspector General actually resolves Tillis's stated concerns about Fed independence, instead emphasizing the investigation remains unresolved. All of the panel's Democrats oppose Warsh's nomination.
Right-Leaning Perspective
Sen. Thom Tillis, R-N.C., said Sunday he is willing to end his blockade of Warsh after the DOJ dropped its investigation, stating on NBC's Meet the Press he is prepared to move on with Warsh's confirmation as an outstanding nominee, and has assurances from the DOJ that they were not using it as a weapon to threaten the independence of the Fed. Tillis said Sunday he's now prepared to back Warsh's nomination to lead the Federal Reserve after the Department of Justice dropped its criminal investigation into current Chair Jerome Powell, after spending weeks saying he couldn't support any new Fed chair while the Justice Department was using its investigative powers to pressure Powell. Tillis had made clear he would block Warsh's confirmation until the Justice Department dropped what he called an illegitimate criminal probe of current Fed Chair Jerome Powell, and on Friday the DOJ dropped it, followed by Tillis dropping his block on Sunday. At Warsh's confirmation hearing, Tillis described the renovation overruns as unfortunate but also legitimate, and said he was confident Warsh would safeguard the Fed's independence from White House pressure to cut interest rates, arguing if anybody thinks a president can appoint somebody and unilaterally control things, you're going to be an unsuccessful chair, if history is any guide. The Conservative Institute noted a Republican senator held up his own president's nominee on principle, insisted on conditions, got those conditions met, and moved forward, the DOJ closed a probe that had no business lingering as a political weapon, and the nominee himself signaled he will exercise independent judgment, even if that means the president doesn't always get the rate cuts he wants. Senate Banking Committee Chairman Tim Scott championed Warsh's nomination, highlighting his prior service as a Federal Reserve Governor during the financial crisis and strong experience navigating major economic challenges, stressing the importance of central bank independence. Republicans emphasized Warsh's previous tenure at the central bank and lengthy economic experience, while Democrats pressed Warsh to account for Trump's attacks on the central bank. Warsh has widespread Republican support.
Deep Dive
The specific angle of this story is the Senate Banking Committee's April 29 vote on Warsh's nomination and the removal of the procedural obstacle that was blocking the nomination—Senator Tillis's opposition. For months, Tillis conditioned his support for any Fed nominee on the Justice Department first ending its criminal investigation into current Fed Chair Jerome Powell. The Justice Department was investigating Powell over alleged cost overruns related to renovations at the Federal Reserve building. On Friday, the U.S. Department of Justice dropped its criminal investigation of Fed Chair Jerome Powell. This development directly resolved Tillis's stated condition, clearing the path for the Banking Committee vote. The disagreement between left and right on this specific vote centers on whether Tillis's concerns have been genuinely addressed. Tillis claims he received assurances from the DOJ that the only way an investigation would be open would be a criminal referral from the IG, and the DOJ made it very clear the current investigation is completely and fully ended. However, Sen. Warren contends the Department of Justice threatened to restart the investigation into Fed Chair Powell at any time while continuing its probe against Governor Lisa Cook. This is a fundamental disagreement about whether the threat to Fed independence has actually been removed, with Democrats viewing the DOJ's action as insufficient and Republicans viewing it as resolving the obstacle. The left's core argument is that moving the investigation from criminal prosecutors to the Inspector General does not meaningfully remove the threat, since the DOJ indicated it could reopen a criminal probe if recommended by the IG. What comes next is the full Senate vote if the committee approves Warsh today. Warsh now has a clear path to replacing Powell as the next leader of the Fed when Powell's term expires in mid-May, the Senate Banking Committee is set to vote on his confirmation on Wednesday, and the full Senate could take it up shortly after. With Republican control of the full Senate and Tillis now supporting Warsh, confirmation appears highly likely. The central unresolved question is not whether Warsh will be confirmed, but whether the institutional safeguards Democrats are raising—around his financial disclosures, his supposed independence from Trump, and his record on financial regulation—will prove prescient if he takes office.