Federal Reserve chair Jay Powell has rebutted the Trump administration’s accusations that he misled Congress over a $2.5bn refurbishment of the central bank’s headquarters, saying it did not inform government planners of changes to the project because they were not “substantial” enough to warrant it.
The White House last week opened a new line of attack against Powell, after Russell Vought, director of the Office of Management and Budget, accused the Fed chair of “grossly” mismanaging an “ostentatious” refurbishment of the Fed’s headquarters.
Vought also claimed Powell had either misled Congress or failed to inform the National Capital Planning Commission of changes that the Fed chair said the central bank had made in order to rein in spending on a project that is now $700mn over budget.
Powell said in a letter addressed to Vought late on Thursday that the Fed had “voluntarily submitted designs for the project and sought and received NCPC approval for designs in both 2020 and 2021”.
He added that since then, the Fed had “made a small number of design changes to scale back or eliminate certain elements and has added no new elements”.
“These changes were intended to simplify construction and reduce the likelihood of further delays and cost increases,” Powell said, adding that the NCPC’s guidance “states that agencies should submit revised project information for approved projects only if substantial changes are made in either the design or plan of the project after NCPC review”.
The controversy erupted after Powell hit back against claims of Fed largesse at a Congressional hearing in late June.
The Fed chair told lawmakers on the Senate banking committee that media reports claiming the new headquarters featured VIP dining rooms and VIP elevators were false. Powell also said plans for new water features had been eliminated.
Vought earlier on Thursday alleged: “They either misled Congress or they need to go back to the National Planning Commission and have a reassessment of the project. These are important things that we are going to get to the bottom of.”
The latest attack on the Fed and Powell underscores how President Donald Trump and his allies are seeking to exploit what they claim is a management failure, rather than focusing just on criticism over the Fed’s monetary policies.
Trump has been criticising Powell, who he has called “stubborn mule”, for months, insisting interest rates should come down sharply from the current level of 4.25 per cent to 4.5 per cent.
Vought, a close ally of the president, on Thursday claimed Trump was “offended” by the scale of the project to refurbish the Marriner S Eccles Building on the National Mall.
He added OMB officials were hoping to visit the site at the Fed in “the next week or so”.
