White House Criticizes Federal Reserve Chairman
The White House has criticized Federal Reserve Chairman Jerome Powell over the $2.5 billion renovation of the central bank’s Washington, DC headquarters. The Office of Management and Budget (OMB) Director Russell T. Vought sent a letter to Powell, expressing the President’s extreme concern over the management of the Federal Reserve System.
Cost Overruns and Luxurious Upgrades
The renovation has seen $700 million in cost overruns, according to public disclosures. The OMB’s letter stated that the project includes "rooftop terrace gardens, VIP private dining rooms and elevators, water features, premium marble, and much more." These upgrades have been criticized as excessive and unnecessary, with some comparing them to the construction of a "Palace of Versailles."
Powell’s Testimony Under Scrutiny
Powell had previously testified before the Senate Banking Committee, denying the luxurious upgrades and calling reports "misleading and inaccurate." However, the OMB’s letter contradicts Powell’s statements, highlighting the inclusion of rooftop terrace gardens, VIP private dining rooms, and other premium features. The letter also notes that the project may be in violation of the National Capital Planning Act (NCPA), which requires federal development projects in Washington to receive approval from the National Capital Planning Commission (NCPC).
Potential Violation of NCPA
The OMB’s letter suggests that the project may deviate significantly from the plan approved by the NCPC in September 2021. This could bring the project outside of the NCPC’s approval and require the Fed to immediately halt construction and obtain a new approval from the NCPC before proceeding. The letter demands clarification from Powell on whether the Federal Reserve’s Constitution Avenue renovation is proceeding according to the NCPC-approved plan.
Trump’s Criticism of Powell
President Trump has also criticized Powell, calling him "Too Late" for maintaining interest rates at current levels. Trump has accused Powell of costing the US hundreds of billions in interest payments and has backed calls for a probe into whether he lied to Congress about the $2.5 billion upgrade to the Fed headquarters.
Financial Concerns
The Federal Reserve is self-funded, earning revenue from the bonds it holds and services it offers. However, it has not turned a profit in recent years due to significant and unusual losses tied to its monetary policy operations. The surge in expenses from the renovation has raised concerns among lawmakers, who are now scrutinizing the framework responsible for the financial shortfall.
Conclusion
The White House’s criticism of Powell and the Federal Reserve’s renovation project highlights concerns over excessive spending and potential violations of federal regulations. The controversy surrounding the project has sparked a wider debate about the Federal Reserve’s management and financial operations. As the situation unfolds, it remains to be seen how the Fed will respond to the OMB’s letter and address the concerns raised by the White House and lawmakers.
