How the Fed chair succession saga could become a real mess
By Bryan Mena, Way Mullery, CNN
Washington (CNN) — The process to install Kevin Warsh, President Donald Trump’s nominee to succeed Federal Reserve Chair Jerome Powell, isn’t going smoothly, and it could get even more complicated.
After a monthslong search process, Trump finally announced his nomination on January 30. Nearly three months later, there still isn’t a certain path for Warsh’s confirmation to the role. For Warsh to become Fed chair, he needs to first be approved by the Senate Banking Committee. That hearing has finally been set for April 21. Then, he will need a final vote in the broader upper chamber.
The problem: North Carolina Sen. Thom Tillis, a senior Republican on the Senate Banking Committee, is still refusing to vote for Warsh unless the Justice Department drops its inquiry into Powell and testimony he gave to Congress last year on cost overruns related to the renovation of the Fed’s Washington, DC, headquarters. Republicans need Tillis’ vote to move his nomination out of committee.
But DC US Attorney Jeanine Pirro, whose office is leading the Powell probe, isn’t budging either. That means Warsh’s nomination remains stalled, even with the end of Powell’s term as chair less than a month away.
If Warsh isn’t confirmed by May 15, Powell’s last day as chair, Powell said he would serve as the chair “pro tempore,” adding that he has “no intention of leaving the board until the investigation is well and truly over with transparency and finality.” The Fed’s Board of Governors also has its own rules on who can serve as a substitute for a vacated position, and it is customary for the current Fed chair to assume the interim role.
Trump, however, does not agree with that plan. On Wednesday, Trump said he would fire Powell if he serves as Fed chair in the interim. If so, Powell is widely expected to sue, sparking yet another legal battle between Trump and a Fed official.
Put together, the confirmation process for the 17th Fed chair is arguably the most complex in the US central bank’s modern history — a far cry from the nominations of prior chairs, including Powell, Janet Yellen, Ben Bernanke and Alan Greenspan.
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