The Federal Reserve on Friday published, at the top of an FAQ section on its website, answers to several questions regarding renovations at two Washington, D.C., buildings occupied by the central bank.
The renovations reportedly have gone more than $600 million over budget, giving the Trump administration a back channel to call for Fed Chair Jerome Powell’s ouster.
White House Office of Management and Budget Director Russ Vought, in a letter Thursdaydemanded that the Fed justify, within seven working days, several facets of the renovation, including rumors about rooftop garden terraces, ornate water features and white marble.
But two weeks before that, six Republican senators asked Powell about the same project.
Given the timing of the Fed’s FAQ response, some observers may wonder for whom the answers are intended: Vought or the senators?
A thorough reading of the response offers a pointed clue (emphasis added).
“We respect the critical importance of the constitutionally derived congressional oversight of our activities, and we work collaboratively and cooperatively with members of Congress to answer questions and to provide information on a broad range of issues,” the Fed wrote Friday.
Translation: Back off, executive branch.
Trump appointees have not backed off.
“The patriotic thing for Jerome Powell to do is to resign,” Bill Pulte, director of the Federal Housing Finance Agency, wrote Saturday on X.
Kevin Hassett, director of the National Economic Council, told ABC News’ “This Week” on Sunday that the Trump administration has the authority to fire Powell “if there’s cause.”
“I think that whether the president decides to push down that road or not is going to depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed,” Hassett told the TV network.
Former Fed Gov. Kevin Warsh, appearing Sunday on Fox Newsalso referenced the renovation “outrageous,” adding that the central bank “has lost its way.”
“It’s … lost its way in supervision, it’s lost its way in monetary policy, and all this big money on big, fancy buildings is just another indication,” Warsh said Sunday.
Hassett and Warsh, though, must be seen through a lens of potential self-interest. They are – at least, according to The Wall Street Journal – Trump’s leading candidates to replace Powell as Fed chair.
What the Fed said
In its FAQ document, the Fed characterized the renovation as a “complete overhaul and modernization that preserves two historic buildings that have not been comprehensively renovated since their construction in the 1930s.” That includes “removing asbestos and lead contamination” and replacing “antiquated” electrical, plumbing, HVAC and fire detection and suppression systems, the central bank said.
Powell told the Senate Banking Committee last month: “There’s no VIP dining room, there’s no new marble. … There are no special elevators — there’s just, there are old elevators that have been there — there are no new water features, there’s no beehives and there’s no roof terrace gardens.”
The Fed backed up that testimony Friday in its FAQ document.
“No new VIP dining rooms are being constructed,” the central bank wrote. “The original elevators are being rehabilitated.”
On the prospect of water features, the Fed wrote: “The Board’s initial design included new water features for 1951 Constitution Avenue, but they have been eliminated. Fountains that were original to the Eccles Building are being restored.”
As to the prospect of “garden terraces,” the Fed said the term “refers to the ground-level front lawn of 1951 Constitution Avenue, which serves as the roof of the parking structure beneath.”
“Vegetated roofs,” also mentioned in the 2021 proposal for the project, are “used to help with stormwater management and to increase building efficiency and roof longevity,” the Fed said, adding such structures are also found on Justice Department and Interior Department buildings “and are encouraged by the General Services Administration.”
Republican senators and Vought both mentioned the use of marble in the renovation. To that point the Fed noted that “the project has salvaged the original exterior marble” from the buildings’ facades and stonework and will reinstall it, only using “new domestic marble where the original was damaged or where needed to keep with historic preservation guidelines and to address concerns raised by external review agencies.”
The mere mention of marble, though, can lead observers to assume that’s the source of cost overruns. To play devil’s advocate, however, President Donald Trump himself issued an executive order in January to promote “beautiful federal civic architecture.”
‘Constructive, collaborative’
In its FAQ, the Fed said overruns stem from “changes to original building designs as a result of consultation with review agencies; differences over time between original estimates and actual costs of materials, equipment and labor; and unforeseen conditions,” such as soil contamination and more asbestos than expected.
Vought, in his Thursday letter to the Fed, alleged the renovations are being funded “on the taxpayer’s dime.” However, according to CNBCthe central bank is self-funding the project through interest it makes on securities it holds, as well as through fees it charges to banks. Vought nonetheless noted, in a social post Thursday, that the Fed has “continu[ed] to run a deficit since [fiscal 2023].”
Vought on Thursday also appeared to threaten to loop in the National Capital Planning Commission, noting that “major design elements” in the renovation appear out of compliance. The Fed on Friday noted that it has “enjoyed a constructive, collaborative, and fruitful engagement with the NCPC,” in which various commissioners noted the central bank’s cooperation, receptivity and responsiveness.
Finally, in what could be seen as the Fed’s move to counter a Trump attempt to isolate Powell as a potential scapegoat, the central bank noted that the renovations project has been “overseen by the members of the Board of Governors”; that the central bank’s Office of Inspector General “has had full access to the project information on costs, contracts, schedules, and expenditures and receives monthly reports on the construction program”; and that the board’s activities are also subject to yearly reviews by the Government Accountability Office.
Additionally – and potentially to counter the notion that cost overruns may have arisen suddenly – the Fed noted that it publishes its balance sheet weekly.
Some observers, however, said it’s critical to consider Trump appointees’ intentions when analyzing the blowback behind the Fed renovation project.
“We can’t ignore context when we are looking at these accusations,” Kathryn Judge, a Columbia University law professor, told The New York Times. “What they’re trying to do is build up a public case and to discredit him.”
Scott Alvarez, a former general counsel for the Fed, likewise said he thinks the issue is designed to “[build] pressure on the chair to make him feel uncomfortable and make him want to leave.”
However, he told The New York Times, “the case here is so light that I don’t think it’s credible.”
Trump appointees may be looking to steer the narrative anyway.
Pulte, in an X post Saturdaysaid he’s “encouraged by reports that Jerome Powell is considering resigning.”
That prospect, though, would go against virtually everything Powell has said publicly.
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