Federal Reserve Chair Jerome Powell is under scrutiny for allegedly lying to Congress about the extravagant $2.5 billion renovation of the central bank’s Washington headquarters. Despite denying claims that the renovation will include lavish amenities, Powell’s statements have been contradicted by official planning documents from 2021.
During a recent Senate Banking Committee hearing, Powell dismissed The Post’s report on the renovation project as “misleading and inaccurate.” He specifically refuted claims of a VIP dining room, new marble, special elevators, water features, beehives, and roof terrace gardens. However, the planning documents approved by government officials clearly outline the inclusion of private dining rooms, extended elevators for governors, vegetated roof terraces, marble, and water features.
Andrew T. Levin, a former Fed official and economics professor, has called for Congress to hold Powell accountable for making false statements under oath. Senator Cynthia Lummis also criticized Powell for being ill-prepared and giving inaccurate information during his testimony. The escalating costs of the renovation, which have already exceeded the original estimate by 30%, have raised concerns about taxpayer subsidies.
Senator Tim Scott, chair of the Senate Banking Committee, likened the renovations to “luxury upgrades that feel more like they belong in the Palace of Versailles.” The excessive spending on the headquarters upgrade has sparked calls for further investigation, with former Department of Government Efficiency chief Elon Musk suggesting that the matter should be looked into.
At a time when the Fed is facing significant losses, totaling $233 billion over the past three years, the revelations about the pricey renovation project have added to the controversy. The Fed’s interest costs have surpassed its earnings from bonds, leading to unprecedented losses in 2023. Despite the financial challenges, Fed officials maintain that their ability to operate and conduct monetary policy remains unaffected.
The profits generated by the Fed are typically transferred to the US Treasury for government funding, while the losses are recorded as a “deferred asset” that must be paid down before allocating funds to other government programs. The ongoing financial struggles of the Fed, coupled with the extravagant spending on the headquarters renovation, have raised questions about accountability and transparency within the central bank.
