Scott Bessent: has called for a review of the Federal Reserve's building renovations

Scott Bessent: has called for a review of the Federal Reserve's building renovations

The spiraling cost of the Federal Reserve's years-long renovation of its Washington, D.C., headquarters has become a focal point in the ongoing pressure campaign by the Trump administration on Fed Chair Jerome Powell. The renovation of the Marriner S. Eccles Building and the 1951 Constitution Avenue Building has experienced significant cost overruns, with estimates rising from approximately $1.9 billion pre-pandemic to $2.5 billion today [1].

The Office of Management and Budget (OMB) Director Russ Vought has raised concerns over the Fed's cost overruns and has requested a review of the project's compliance with design elements approved by the National Capital Planning Commission (NCPC). Vought's inquiry comes amid broader efforts by the Trump administration to pressure the Fed into lowering interest rates [1].

Powell responded to Vought's letter by noting that the Fed has established a public website outlining the project's goals, cost drivers, and specific features. He also emphasized that the Board of Governors and the central bank's independent inspector general have oversight of the renovations. Powell highlighted that the project's scope is large due to the need for significant structural repairs and updates to make the buildings safe, healthy, and effective places to work [1].

The Fed's renovations include the removal of asbestos and lead contamination, complete replacement of antiquated systems such as electrical, plumbing, heating, ventilation, and air conditioning, as well as fire detection and suppression systems. The renovations also aim to preserve the buildings' historic look while making them energy-efficient and accessible for people with disabilities [1].

Vought's letter inquired about specific elements, such as VIP dining rooms and elevators, which Powell addressed, stating that there are no such elements being constructed as part of the project. The Fed has also salvaged original marble for reinstallation and will use domestic marble sourced from Georgia to replace damaged or necessary areas [1].

The situation has raised concerns about the Fed's independence and the potential for political meddling in monetary policy. A recent Supreme Court opinion reinforced the legal interpretation that Fed governors cannot be dismissed over interest-rate decisions unless there is "cause" [2]. The Fed counters that the higher costs are a function of complex renovations to turn large old buildings into energy-efficient, functional spaces that retain their historic look [2].

The renovation project has drawn criticism from Trump allies who have accused the Fed of mismanagement and even fraud. However, the Fed maintains that the higher costs are due to unforeseen problems and the need to preserve the buildings' historic appearance [2].

References:
[1] https://www.foxbusiness.com/economy/see-it-pricey-federal-reserve-renovation-project-center-controversy
[2] https://www.reuters.com/world/us/fed-building-renovations-center-trumps-fight-with-powell-five-things-know-2025-07-17/