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GOP angst grows over Powell investigation

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A growing number of Republicans on Capitol Hill are expressing unease with the Justice Department’s move to investigate Federal Reserve Chair Jerome Powell, a sign that the probe could become a major inflection point over GOP lawmakers’ concerns about central bank independence.

Powell announced Sunday that the DOJ is investigating him over statements to Congress about renovations of the Fed’s headquarters in Washington. He said the issue was a pretext to target him in response to President Donald Trump’s frustration over the Fed’s hesitance to aggressively lower interest rates.

Sen. Kevin Cramer (R-N.D.), a Powell critic who sits on the Senate Banking Committee, said in a statement Monday that “Jerome Powell is a bad Fed Chair who has been elusive with Congress, especially regarding the overruns of the elaborate renovations of the building.”

“I do not believe however, he is a criminal,” he said. “I hope this criminal investigation can be put to rest quickly along with the remainder of Jerome Powell’s term. We need to restore confidence in the Fed.”

Senate Banking Republicans are expected to meet tonight to discuss major cryptocurrency legislation the panel is aiming to hold a vote on this week — and some members are expecting to discuss the Powell probe as well, according to two Republicans with knowledge of the plan who were granted anonymity to discuss closed-door matters.

“There will be a lot of chatter,” said one of the Republicans.

The investigation is also a concern for some House Republicans. Rep. Mike Lawler (R-N.Y.), who sits on the House Financial Services Committee, told Blue Light News: “While I fundamentally believe Chairman Powell was late in addressing inflation under Joe Biden and has been woefully slow in lowering interest rates over the past year, the independence of the Federal Reserve is paramount and I oppose any effort to pressure them into action.”

Asked about the Powell investigation on Fox Business on Monday, Sen. Roger Marshall (R-Kan.) bashed the central bank chief and said the “president is sending a message to everybody that we’re going to be looking out for fraud, waste and abuse.” But, pressed by host Maria Bartiromo about whether Powell lied to Congress, Marshall said he would “let the system play through here,” and added: “I think there’s other issues that we should be focused on.”

The controversy over the renovations to the Fed’s Washington headquarters has been amplified by Senate Banking Republicans, including Chair Tim Scott (R-S.C.), who pressed Powell about the issue during a hearing last June following a New York Post article about cost overruns on the project.

Now, the DOJ probe is threatening to derail the Senate’s consideration of future Fed nominees. Sen. Thom Tillis, a retiring North Carolina Republican who sits on the Banking panel, said Sunday he will “oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved.”

“If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” Tillis said in a statement. “It is now the independence and credibility of the Department of Justice that are in question.”

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Congress

House Democrats introduce alternative war powers resolution

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Half a dozen moderate House Democrats have introduced their own war powers resolution as the chamber barrels towards a floor vote later this week on a bipartisan measure to curb President Donald Trump’s use of force in Iran.

It’s a sign of how some Democrats are struggling to reconcile their opposition to the Trump administration’s military action with a desire to appear hawkish on national security — even in a largely symbolic capacity.

The new proposed resolution from the six lawmakers would call for an end to military operations in Iran within 30 days unless Congress provides authorization for use of military force or a declaration of war. In contrast, the resolution that is being forced for consideration Thursday from Reps. Thomas Massie (R-Ky.) and Ro Khanna (D-Calif.) would require the immediate withdrawal of troops from Iran.

The co-sponsors of the alternative resolution are Democratic Reps. Josh Gottheimer of New Jersey, Greg Landsman of Ohio, Henry Cuellar of Texas and Jared Golden of Maine, alongside Reps. Jim Costa and Jimmy Panetta of California.

The Massie-Khanna resolution has little chance of becoming law, even if it makes it through the House — which is no guarantee. Still, there’s pressure on Democrats to take a unified stance in support of the bipartisan proposal and against the Trump administration’s actions, with Democratic leadership and ranking members of key committees urging a “yes” vote to rein in the president.

Asked about the new war powers resolution from members of his caucus, House Minority Leader Hakeem Jeffries during a Tuesday news conference said he had not yet seen the legislative text.

“Our focus is on the resolution that will be on the floor this week,” the New York Democrat said.

Jeffries also said House Democrats will discuss the matter Wednesday afternoon, following an all-member House briefing scheduled for Tuesday evening with Trump administration officials on the unfolding situation in Iran.

“We’ll continue to make the strongest possible case,” Jeffries said. “There is going to be very strong Democratic support for the War Powers Resolution across the ideological spectrum.”

Bipartisan members of the Problem Solvers Caucus, of which Gottheimer is a co-chair, have discussed the matter during their own meetings in recent days. Many have shared concerns that the Massie-Khanna resolution is overly broad and would hamstring the administration regarding key national security efforts, according to three people with direct knowledge of the matter.

Meredith Lee Hill contributed to this report.

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Mike Rounds seeks Pentagon briefing on Anthropic spat

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A top lawmaker on the Senate Armed Services Committee has requested a briefing from the Pentagon on its escalating feud with AI startup Anthropic, which has prompted the Trump administration to threaten to declare the company a supply chain risk.

“I’ll withhold judgment until I’ve had my briefing,” Sen. Mike Rounds (R-S.D.), chair of the panel’s cybersecurity subcommittee, told reporters Tuesday, in response to questions from Blue Light News about the unprecedented move.

A supply chain risk designation would result in Anthropic being blacklisted from government contracts — something typically reserved for firms with ties to U.S. foreign adversaries. The technology company is expected to challenge such a designation in court.

The Defense Department and Anthropic did not immediately respond to requests for comment.

Negotiations with the Pentagon over use of Anthropic’s AI systems hit a roadblock last week when the firm refused to lift restrictions on the military’s unfettered access to its technology. The startup had sought to stop its systems from being used in fully autonomous weapons systems or for domestic surveillance.

President Donald Trump, roughly one hour before the deadline to meet the Pentagon’s demands, directed all federal agencies to cease use of Anthropic’s AI and declared a six-month phase-out period in a post on Truth Social. Trump threatened “major civil and criminal consequences,” and Defense Secretary Pete Hegseth in an X post accused the company of endangering national security.

Last week, key defense policy lawmakers on Blue Light News urged a ceasefire as tensions between Hegseth and Anthropic CEO Dario Amodei escalated. Top Senate defense appropriators Mitch McConnell (R-Ky.) and Chris Coons (D-Del.), as well as Senate Armed Services Committee leaders Roger Wicker (R-Miss.) and Jack Reed (D-R.I.), sent a letter to the two men expressing “concern over the escalatory direction of negotiations between the Department of Defense and Anthropic.”

Sen. Thom Tillis (R-N.C.), who is retiring at the end of his term in 2027, also weighed in Tuesday, telling reporters: “They’re telling Anthropic that they should compromise their code of conduct to facilitate whatever it is Hegseth or somebody wants.” He added that this will give other AI upstarts the “green light” to cast aside imposing their own codes of conduct.

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Lutnick agrees to testify in House Oversight’s Epstein probe

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Commerce Secretary Howard Lutnick has “proactively agreed to appear voluntarily” before the House Oversight and Government Reform Committee as part of the panel’s investigation into convicted sex offender Jeffrey Epstein, Chair James Comer announced Tuesday.

“I commend his demonstrated commitment to transparency and appreciate his willingness to engage with the Committee,” Comer, a Kentucky Republican, said in a statement. “I look forward to his testimony.”

A date for Lutnick’s deposition is not yet known.

Lutnick has not been accused of wrongdoing in connection with Epstein’s crimes, and he continues to have the White House’s support. But he has faced calls for his resignation from Democrats after the Epstein files released by the Justice Department revealed the full extent of his relationship with the disgraced financier. Lutnick had previously suggested that he cut ties prior to Epstein’s 2008 conviction for soliciting a prostitute. The Commerce secretary later conceded the two men had lunch together following those charges.

Shortly before Comer’s announcement Tuesday afternoon that Lutnick would cooperate with the panel, Rep. Nancy Mace (R-S.C.) shared her intention to force a vote to subpoena Lutnick during a House Oversight hearing scheduled for Wednesday on an unrelated topic. While committee Republicans have also expressed a desire to hear from Lutnick, his agreement to testify suggests that most GOP members would prefer to avoid having to take a politically uncomfortable vote to compel testimony from a high ranking Trump administration official — plus hand Democrats victory.

On Monday, the Oversight Committee released footage of a deposition with former Secretary of State Hillary Clinton, where Mace accused Lutnick of operating as a “go-between between [Hillary Clinton] and Jeffrey Epstein raising money for [her].” Clinton has said her work with Lutnick was around the response to the Sept. 11, 2001, attacks in New York, in which Lutnick’s company lost many employees.

Clinton said she never recalled meeting Epstein and has not been accused of wrongdoing.

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