Senator Scott Demands Answers on Federal Reserve's Contentious Renovation Project

Investigation into the Expensive Renovation Costs

Senator Tim Scott has requested more information from Federal Reserve Chair Jerome Powell regarding the central bank's $2.5 billion headquarters renovation project, escalating scrutiny on the institution over the project. This move comes amid increasing criticism from Republicans, including former President Donald Trump, over the project's rising costs.

In a letter sent to Powell, Scott, a South Carolina Republican and ranking member of the Senate Banking Committee, expressed concerns about apparent discrepancies between publicly available information, Powell's recent congressional testimony, and information found on the Fed's website.

Scott's letter follows a meeting between Senate Banking Committee staff and Federal Reserve representatives on July 17 to discuss the renovations. Scott has been among several Republicans pressuring the Fed on the project in recent weeks. President Trump and administration officials have also targeted the project, with some incorporating their criticisms of the project into their broader calls for the Fed to lower interest rates. However, interest rate reductions or increases have different economic effects that should be carefully considered.

Powell's term as chair is set to expire next May, but he and other policymakers have resisted calls for rate cuts, angering Trump, who has said Powell should resign and reportedly came close to firing the Fed chair earlier this month.

Trump's Controversial Visit to the Construction Site

The White House announced that Trump would personally visit the construction site. The visit was initially arranged for three administration officials who requested to see the project, including White House Office of Management and Budget Director Russ Vought and Federal Housing Finance Agency Director Bill Pulte.

The renovation project involves two historic buildings located along Constitution Avenue near the National Mall. The project's budget has increased from $1.9 billion in 2023 to $2.5 billion by 2025. Accurate budget estimations are critical for large projects like these.

Scott's letter posed over a dozen questions to Powell about the project. "To honor your commitment to transparency, please provide responses, documents, and information on the issues identified above as soon as possible, but no later than August 8," Scott wrote. Some of his questions focused on design elements contained in a 2021 document from the National Capital Planning Commission (NCPC), which critics argue are overly lavish. For example, Scott noted in his letter that the NCPC document referenced a private elevator for use by Fed governors, but a "Frequently Asked Questions" page on the Fed's website stated that "there are no elevators exclusively for governors' use." He then requested that the Fed provide information "explaining the purpose of having a 'Governors' elevator' in the renovated building."

Perjury Allegations

In his Senate testimony on June 25, in response to questioning from Scott and other Republicans, Powell acknowledged that the project's costs had increased, but he dismissed media reports describing the renovations as lavish. He also said that some amenities previously included in the renovation plans had been removed.

Scott's letter requests that Powell provide details about additions to and subtractions from the NCPC plans, the timing of the changes, and an itemized list of all project cost overruns.

Some Republican critics of the project are latching onto Powell's testimony about the renovations, claiming the Fed chair misled lawmakers in his comments. Republican Anna Paulina Luna requested that the Department of Justice consider investigating and prosecuting Powell for allegedly committing perjury about the project's details while testifying.

Prior to her request, Pulte had posted on social media for weeks making similar accusations, saying it warranted Powell's removal "for cause" from the Fed's Board of Governors.

The Fed is trying to contain the negative fallout from the hearings and increasing scrutiny over the renovations. The Fed added an FAQ section to its website earlier this month and responded to Vought's inquiries about the renovations. Powell had previously written to Scott and Elizabeth Warren, the top Democrat on the Banking Committee.

"We take seriously our responsibility as good stewards of public resources and fulfilling the duties that the Congress has delegated to us on behalf of the American people," Powell wrote in a letter dated July 14. "We have been very careful to ensure that the project is subject to careful oversight since the Board first approved the project in 2017."