In proceedings that lasted less than 15 minutes, the Senate Committee on Housing, Banking and Urban Affairs voted along party lines to advance President Donald Trump’s nomination of Kevin Warsh to replace Jerome Powell as chair of the Federal Reserve when Powell’s term expires next month.
Only one Democratic member of the committee, Sen. Raphael Warnock, D-Ga., stuck around Wednesday morning to cast a vote in person. Ranking member Elizabeth Warren, D-Mass., protested moving the nomination forward in prepared remarks, then left the chamber.
Describing Warsh as a “uniquely unfit candidate” for the role, Warren framed the nomination as part of what she described as Trump’s “illegal attempt to seize control of the Fed and artificially juice the economy.” Warren also said that Warsh did not satisfactorily address how he would divest himself of his financial assets to avoid conflicts of interest.
Offering stark counterpoint, Sen. Tim Scott, R-S.C., who chairs the committee, called Warsh “battle tested” and said his leadership is “absolutely essential” and uniquely suited to tackle inflation.
The former Fed governor is broadly supported by industry leaders. He testified to Congress last week that maintaining Fed independence is a top priority of his, and that Trump has never requested he lower interest rates or made his willingness to lower rates a condition of his nomination.
Warsh repeatedly testified last week that he has worked with central bank ethics officials and entered into a formal agreement (submitted for the record at the hearing) with the Office of Government Ethics to divest his financial interests within 90 days of being sworn in as chair, if confirmed.
With all signs indicating that the federal investigation into Powell and the central bank that had delayed Warsh’s nomination has been reasonably concluded, lawmakers ultimately advanced Warsh’s nomination to a full Senate vote in a party-line tally of 13-11.
Citing an ongoing examination by the Fed’s Office of Inspector General, Sen. Thom Tillis, R.-N.C., who had staunchly refused to advance any nominee to replace Powell until the federal probe had ended, said that he had “confidence this investigation is over.”
Powell has said he would not leave his chair role until the probe was resolved. The Department of Justice unexpectedly dropped the investigation last week, though it warned alternative authorities like congressional oversight could be used to examine spending related to ongoing renovations at the Fed headquarters.
In holding back their support in Wednesday’s brief vote, Democrats signaled their concerns that threats to Fed independence have not been fully extinguished, with a case involving Trump’s attempted firing of Fed Governor Lisa Cook over unproven accusations of mortgage fraud still before the Supreme Court.
