Tensions of "renovation" in the Trump-Powell line

US President Donald Trump is reportedly working with his advisors to develop a new justification for dismissing Federal Reserve ( Fed ) Chair Jerome Powell. The US Supreme Court has indicated that Trump would need a reason to fire Powell. Trump and his administration, who frequently target Powell for refusing to lower the policy rate, have recently shifted their focus to another area. According to CNN International, the justification the Trump administration is trying to present isn't a lack of understanding regarding monetary policy or interest rates, but rather a construction-related issue. Accordingly, the over-budget renovations at the Federal Reserve (System of Central Banks) complex in Washington, D.C., have been particularly scrutinized by the Trump administration.

COST JUMPED FROM 1.9 BILLION TO 2.5 BILLION The structure in question opened in the 1930s and had never been fully renovated in the last 90 years. Powell and other Fed officials launched a “multi-step, multi-building process” to renovate the complex. However, like many government construction projects, this project exceeded its previously planned budget. The initial cost was $1.9 billion. This amount eventually rose to $2.5 billion. Trump himself nominated Powell for the Fed chair; renovation plans had begun during Trump’s first term. Responding to criticism of the renovation, Powell asked the Fed’s inspector general to reexamine the project. POWELL’S LETTER TO THE WHITE HOUSE As discussions continue about the renovation and its cost, Federal Reserve Chairman Powell also wrote a letter yesterday evening to Russell Vought, Director of the White House Office of Management and Budget. Powell, stating that there was no wrongdoing or malfeasance in the renovation work, stated that the changes to the Federal Reserve’s Washington headquarters were much needed, that they were approved in accordance with the law, and that they were transparent. According to AA, Powell also noted in his letter that information about the project had been added to the Fed’s website for transparency, and that this information supported the information he expressed at a U.S. Senate committee hearing on June 25. The Fed Chair, stating that it is their responsibility to make the best use of public resources and that they take this responsibility seriously, said, “We have placed great importance on ensuring that the project is carefully overseen since it was first approved by the Board of Trustees in 2017.” “BOARD MEMBERS APPROVE THE PROJECT EVERY YEAR” Powell explained that Fed board members approve the project’s budget every year, noting that the project is a large-scale project because it includes the renovation of two historic buildings, and that the buildings in question were constructed in the 1930s. Powell stated that periodic work has been done to make the buildings in question habitable, but that neither building has undergone a comprehensive renovation since their initial construction. The Fed Chair also stated in his letter that the project was implemented according to a plan approved by the National Capital Planning Commission, and that no additions had been made to the plan other than minor design changes to simplify the structure and avoid further delays or cost increases. Powell added that no “VIP dining room” or “VIP elevator” was being constructed as part of the project. POWELL HAD 7 DAYS TO RESPONSE Vought had asked Powell about the renovations in a letter last week and requested a response within seven business days. US President Trump also accused Powell of misleading Congress about the project, saying, “This is a renovation. How can you spend $2.5 billion? And he hasn’t provided a proper explanation.”