Jerome Powell offered his first detailed defense of a $2.5 billion renovation of the Federal Reserve’s headquarters, arguing in a Thursday letter to White House budget director Russell Vought that “we take seriously the responsibility to be good stewards of public resources.”
It was a point-by-point response to a July 10 letter Powell received from Vought that raised a number of concerns about cost overruns and certain design elements, while warning that “the president is extremely troubled by your management of the Federal Reserve system.”
“Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington DC headquarters,” Vought wrote to Powell last Thursday, citing plans for rooftop terrace gardens, VIP private dining rooms and elevators, water features, and marble.
Trump himself has criticized the project over the past week, even saying it “sort of is” a fireable offense. On Wednesday Trump said he didn’t plan to fire Powell but also left the door open to that possibility while talking about the renovation project.
“I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud.”
Powell in his Thursday letter said “we take seriously the responsibility to be good stewards of public resources” and “we have taken great care to ensure the project is carefully overseen since it was first approved by the Board in 2017.”
The two buildings along the National Mall were in need of “significant structural repairs,” he noted, to make them safe and healthy for workers. They had not had a comprehensive renovation since they were built in the 1930s.
The Fed submitted designs to the National Capital Planning Commission (NCPC) and received approval from that agency in 2020 and 2021.
“Since the plan’s approval by the NCPC, the Board has made a small number of design changes to scale back or eliminate certain elements and has added no new elements,” Powell wrote in the letter.
He stressed that the changes were intended to simplify construction and reduce the likelihood of further delays and cost increases.
He said that although the Fed board’s initial design included new water features for the 1951 Constitution Avenue building, they have been eliminated. Fountains that were original to the Eccles building are being restored.
No VIP dining rooms are being constructed, he said, there is no VIP elevator.
“Guidance from the NCPC 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,” Powell wrote.
“The Board does not regard any of these changes as warranting further review.”
Many of these statements generally align with what Powell told Senate lawmakers on June 25 when asked about media reports on the project.
On that day, Republican senators asked him about media reports that described the expenses and features of the Fed renovation project and cited allegations that the cost of the renovation has increased by more than 30% to $2.5 billion.
Citing media reports, GOP senators said plans showed the renovated buildings will include rooftop garden terraces, ornate water features, new elevators that deliver board members directly to their VIP dining suite, and the use of white marble with a private art collection in the basement.
Powell called the media reports quoted by senators “misleading and inaccurate,” saying that there was no VIP dining room nor new marble. Powell stressed during his testimony that there are no new water features, no beehives, no rooftop terrace gardens, and no special elevators.
“So all the sort of inflammatory things that the media said are either not in the current plan or just inaccurate,” Powell said.
In his letter to Powell, Vought said that Powell’s testimony raised serious questions about the project’s compliance with the National Capital Planning Act, which requires that projects like the Fed headquarters be approved by the National Capital Planning Commission (NCPC).
The NCPC did approve a plan in 2021, Vought said, but Powell’s testimony “appears to reveal the project is out of compliance with the approved plan.”
That, he said, would be a violation of the National Capital Planning Act and require the Fed to halt construction and obtain a new approval from NCPC.
But Powell said Thursday in his letter that “the project is proceeding in accordance with the plan that the NCPC approved in September 2021.”
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