Tillis drops Warsh objections after DOJ exits Powell case

• Key insight: Tillis’ acquiescence opens the door for a party-line confirmation of Warsh from the Senate Banking Committee on Wednesday. 
• What’s at stake: Warsh will have considerable power over the Fed’s rate setting committee as chair of the Federal Reserve Board. 
• Forward look: Warsh’s path to confirmation has now been cleared of its only significant hurdle, and approval votes in the Senate Banking Committee and full Senate are virtually assured. 

WASHINGTON — Sen. Thom Tillis, R-N.C., said he will vote for Kevin Warsh as the next Federal Reserve chair, ending an impasse on Warsh’s nomination that has bogged down the Senate Banking Committee for months. 

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Tillis’ statement clears the way for a vote on Warsh, President Donald Trump’s choice to run the Federal Reserve as chairman, which is now expected on Wednesday. 

Tillis had promised to oppose Warsh’s nomination in protest over the Department of Justice’s investigation into comments that current Fed Chairman Jerome Powell made about the Fed building’s renovation costs. Powell said that the investigation is a pretext for removing him from his seat and replacing him with someone who would do the president’s bidding on interest rates. 

While Tillis, at Warsh’s confirmation hearing last week, said that he supports Warsh’s candidacy generally, he said he would oppose it while the Powell investigation is ongoing. On Friday, the DOJ moved to drop its investigation. 

“I have directed my office to close our investigation as the IG undertakes this inquiry,” U.S. Attorney for the District of Columbia Jeanine Pirro said on X. “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”

Tillis later that weekend said that he would support the nomination. 

“I am prepared, and with the assurances from the Department of Justice that the case is completely and fully settled, … to move on with the confirmation of Mr. Warsh,” Tillis said on NBC’s Meet the Press Sunday morning. 

In a separate statement, Tillis addressed Pirro’s comments on potentially reopening the case. 

“I take the Department of Justice at its word: the investigation is closed, and any appeal of Judge Boasberg’s ruling will be with respect to legal principles and not for the purpose of reissuing subpoenas,” Tillis said. “Only a criminal referral from the inspector general would cause a reopening of the investigation.”

In the Meet the Press interview, Tillis said that he is confident the case won’t be reopened to push Powell in the future. 

“We worked a lot over the weekend to make sure that we were very clear that we had the assurances from the DOJ that I needed to feel like they were not using the DOJ as a weapon to threaten the independence of the Fed,” he said. 

The DOJ will likely appeal the judge’s ruling that negated the DOJ’s subpoenas, but that would just be to challenge the basis for that ruling, he said, and would “not in any way constitute a basis for reopening the investigation.”