The Senate will move forward with the nomination of Kevin Warsh to head the Federal Reserve after a key Republican lawmaker, Sen. Thom Tillis of North Carolina, said Sunday he was ready to lift his block and give his support for confirmation.
For weeks, Mr. Tillis refused to promote Mr. Warsh or any other Fed nominee while the Trump administration investigated the current chairman, Jerome H. Powell, in an investigation that many described as politically motivated.
But Jeanine Pirro, the U.S. attorney for the District of Columbia, said Friday that the Justice Department would drop the matter involving cost overruns in the renovation of the Fed’s headquarters. Although Ms. Pirro said she would “not hesitate” to reopen the criminal investigation, her move to step aside still proved enough for Mr. Tillis, who said on NBC’s “Meet the Press” that he was ready to move forward with an important first committee vote on Mr. Warsh.
“They have made it very clear that the ongoing investigation is complete and complete,” Mr. Tillis said of his discussions with the Justice Department.
The senator said those discussions gave him the reassurance he needed “to feel like they’re not using the DOJ as a weapon to threaten the Fed’s independence.”
Mr. Tillis’ vote will determine whether Mr. Warsh, who served as Fed governor from 2006 to 2011, is confirmed until Mr. Powell’s term officially ends on May 15. While Mr Warsh enjoys broad support among Republicans, Senate Democrats have called him a “sock puppet” as President Trump has insisted he would only choose someone who favors lower interest rates to replace Mr Powell.
On the Banking Committee, which oversees the Fed, Republicans hold a narrow 13-11 majority, meaning Mr. Tillis’ opposition there has created an insurmountable impasse. On Wednesday, lawmakers will vote on whether to advance Mr. Warsh’s nomination for the full Senate.
If confirmed, Mr. Warsh will take the helm of an institution that has had to defend its ability to operate independently amid an extensive White House pressure campaign for lower interest rates.
The criminal investigation into Mr. Powell and the Fed was the administration’s latest broadside and followed an attempt by Mr. Trump to oust incumbent Gov. Lisa D. Cook last year. This case is currently before the Supreme Court.
Mr. Trump has also threatened to fire Mr. Powell if he decides to stay on at the central bank after his term as chairman ends in May. He can remain as governor until 2028.
Mr. Powell has not yet announced whether he will do so, but has agreed he will not leave until the investigations against him and the Fed are “clearly, transparently and definitively concluded.”
He is expected to face questions about his future at a news conference this week after the Fed’s next policy meeting, where officials are expected to keep interest rates steady as they grapple with an ongoing energy shock from the war in Iran.
In her statement on Friday, Ms. Pirro said the investigation into Mr. Powell would instead be conducted by the Fed’s inspector general. This office has been reviewing the matter since July.
Mr. Tillis described the watchdog as credible on Sunday while brushing aside recent comments from Mr. Trump and his surrogates that suggested they might continue to scrutinize Mr. Powell. Those measures, the senator said, essentially backfired on the president by slowing Mr. Warsh’s confirmation.
“That’s the absurdity of the whole thing. If this investigation, which is now complete, had never happened, we wouldn’t have had this discussion. He would have been confirmed by May 15,” the senator said, adding that he expected the Senate to act by that date when Mr. Powell’s term ends.
Mr. Tillis also said he was not concerned about the possibility that Ms. Pirro could soon return to court and appeal a decision that had prevented her from issuing a subpoena against Mr. Powell. The judge in that case denied the request on the grounds that the investigation itself was politically motivated.
The senator said he believed the appeal was aimed at challenging a part of the ruling that did not affect Mr. Powell, although he noted that the Fed chairman might remain at the central bank as governor while the case is resolved.