President Donald Trump has a Jerome Powell-sized problem with installing Kevin Warsh as the new Fed chair.
A key Republican senator has vowed to oppose the confirmation of any nominee to be the next Federal Reserve chairman until the Department of Justice’s probe into Powell, the current chair, is resolved.
That senator — Thom Tillis of North Carolina — happens to sit on the Senate Banking, Housing, and Urban Affairs Committee, which considers Fed chair nominations. If all Democrats join Tillis in opposing Warsh’s confirmation, Warsh’s nomination will effectively be stuck in committee.
In a post on X on Friday, Tillis made clear that he has nothing against Warsh, who has otherwise been lauded as a strong pick by both Republicans and economists.
“Kevin Warsh is a qualified nominee with a deep understanding of monetary policy,” Tillis wrote, later adding: “Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.”
Earlier this month, Powell revealed that the DOJ issued grand jury subpoenas to the Federal Reserve related to recent renovations at the building.
Powell called the probe an effort to exert pressure on the central bank’s monetary policy, and central bankers from around the world have rallied to Powell’s defense.
Trump has said that he had no knowledge of the subpoenas before Powell made them public.
In a statement, White House spokesman Kush Desai said that Warsh is “eminently qualified to serve” as the next Fed chair and that the White House “looks forward to working with the Senate to quickly confirm him and get the Federal Reserve back on track.”
Why one senator has so much power
Under Senate rules, before the full chamber can vote on a nominee, it must be reported “favorably” by the committee with jurisdiction, which requires a majority vote.
Democrats are expected to broadly oppose Warsh’s confirmation, with many raising concerns about the independence of the Fed.
Sen. Elizabeth Warren, the top Democrat on the committee, said in a statement on Friday that “no Republican purporting to care about Fed independence should agree to move forward with this nomination” under the circumstances.
If Tillis and every Democrat vote against Warsh’s nomination, that leads to a deadlocked 12-12 committee vote.
It would take 60 votes in the Senate to bypass that committee vote and bring his nomination to the floor — an unlikely prospect, given that it requires Democratic support.
Senate Majority Leader John Thune has acknowledged the predicament. According to POLITICO, when asked on Thursday whether Warsh could be confirmed without Tillis’s support, Thune said: “Uh, probably not.”
Earlier this year, Tillis opted not to seek reelection, making it far more difficult for Trump to exert pressure on him to change his mind.
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