The lone Republican who could tank Trump’s Fed pick

President Donald Trump’s pick to overhaul the Federal Reserve has enjoyed support from the commander in chief’s allies in the Senate, but one lawmaker just might shut down the nominee’s confirmation.

Trump nominated Kevin Warsh to chair the Federal Reserve back in January after publicly feuding with current Chair Jerome Powell for failing to cut interest rates and for his multibillion-dollar renovation of the Fed building. Since then, Warsh took the first step of the confirmation process by going to Capitol Hill to testify before the Senate Banking Committee on Tuesday.

‘Political interference or legal intimidation is non-negotiable.’

Warsh received glowing reviews from the seven Senate Republicans after his hearing, including from GOP Sen. Thom Tillis of North Carolina, who has butted heads with Trump in the past. Despite Tillis’ endorsement of Warsh, the retiring senator drew a bold red line for the administration that could cost the confirmation.

“Kevin Warsh is a great nominee to be chairman of the Federal Reserve, and I look forward to supporting him out of committee once the DOJ drops their bogus investigation into Chairman Powell that threatens the independence of the Fed,” Tillis said in a statement.

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Tom Williams/CQ-Roll Call Inc./Getty Images

Tillis has repeatedly demanded that the administration suspend its investigation into Powell, even threatening to block nominees he supports, like Warsh. Notably, the Senate Banking Committee is composed of seven Republicans and six Democrats, meaning Tillis’ vote is necessary to advance Warsh’s nomination assuming the vote falls along party lines.

“The Department of Justice continues to pursue a criminal investigation into Chairman Jerome Powell based on committee testimony that no reasonable person could construe as possessing criminal intent,” Tillis said following Warsh’s nomination in January. “Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.”

“My position has not changed: I will oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved.”

One viable “off-ramp” that has been floated by Republican Sen. Tim Scott of South Carolina, who chairs the committee, is to create a subcommittee to investigate and oversee the Federal Reserve’s over-budget construction. This would, in effect, replace the Department of Justice’s criminal probe into Powell but still allow the administration and its allies to investigate the Fed.

It’s unclear whether the DOJ would drop the investigation, but Tillis expressed enthusiasm about the potential resolution.

“I not only think it’s a good off-ramp, but I also think it’s good governance,” Tillis said.

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