Congress
Republicans give Warsh room on interest rates
The Federal Reserve just made congressional Republicans’ lives even harder in the run-up to the November midterm elections. But they’re holding their fire on Fed Chair Kevin Warsh.
The Fed this week hiked interest rates for the first time since Warsh took over as the central bank’s leader. The central bank’s unanimous decision to increase borrowing costs threatens to worsen the growing problems Republicans face around voters’ views of the economy and the high cost of living.
But some GOP lawmakers indicated they were relieved to see Warsh’s willingness to buck President Donald Trump after he faced withering criticism during his confirmation process from Democrats, who said he would do the president’s bidding in the role.
“The Fed has to be independent. They showed that they were independent,” said Sen. Mike Rounds, a South Dakota Republican who is up for reelection. “That should give confidence to the markets.”
Republicans’ willingness to give Warsh room — despite its potential political downsides for them — highlights their deference to the new Fed chief.
“It’s not good,” said Sen. John Cornyn, a Texas Republican who lost a primary earlier this year to a Trump-backed opponent. “But it’s a fact that they need to get inflation under control. But the timing is not optimal.”
The decision to hike rates comes amid an uneasy dynamic where the Fed is taking action to tamp down rising inflation while Trump wants to see the economy boosted by cheaper borrowing costs. Republican lawmakers, meanwhile, are caught between supporting Trump’s economic agenda and voicing confidence in Warsh’s ability to bring inflation under control.
Sen. Katie Britt (R-Ala.), a staunch supporter of the president who sits on the Senate Banking Committee, said that while she and Warsh “may have a different opinion on how we achieve a place where ultimately interest rates are low” and that she’d “love to see [lower rates],” she “trust[s] what [Warsh] is doing, and appreciate[s] the independence of the Fed.”
Warsh was tapped by Trump for the job in January with the hope that he would lower rates. However, since he was nominated, the U.S. entered into a conflict with Iran, high tariffs continued and gas prices soared, among other inflation and affordability concerns.
Trump-aligned lawmakers are cautioning against moving too aggressively to increase borrowing costs — but they are doing so gently.
Sen. Bill Hagerty (R-Tenn.) said in an interview that Warsh is “under a tremendous amount of pressure,” pointing to other Fed officials’ support for a hike.
“I understand the concerns about inflation, but I do think there’s a significant component of inflation that will be addressed as we address the situation in the Middle East,” Hagerty said.
Forty-six members of the Senate Democratic caucus are demanding that Defense Secretary Pete Hegseth provide a detailed accounting of the Iran war’s costs, arguing that the Pentagon has failed to explain how it has spent, and plans to spend, tens of billions of taxpayer dollars.
The letter, led by Michigan Sen. Elissa Slotkin, was signed by every member of the Senate Democratic caucus except Sen. John Fetterman. Independent Sens. Bernie Sanders and Angus King, who caucus with Democrats, were also included.
The senators asked the Pentagon to provide a breakdown by Sept. 30 of all direct and indirect costs incurred to date in the conflict, as well as a breakdown of the administration’s $67 billion supplemental request. The senators also sought a detailed plan for how $34 billion of leftover funds allocated to the Pentagon in Republicans’ Big Beautiful Bill will be spent.
The letter also requests that the department specify which portions of the requested funds are intended to reimburse past expenses, and which are meant for future operations.
“Despite asking for tens of billions of additional taxpayer dollars, you have so far failed to provide basic information on how this money has and will be spent,” the senators wrote. “Congress must have access to this information to carry out our oversight responsibilities. It is the bare minimum that any American would expect in balancing their own household budget.”
The Pentagon did not immediately respond to a request for comment.
The demand comes as the war enters its seventh month with no agreement to end the conflict. On Tuesday, the Congressional Budget Office said the conflict would reach about $2 billion to $3 billion a month, noting that the first five months cost the U.S. $38 billion — the most comprehensive look at the conflict ahead of the midterm elections.
Fetterman has repeatedly broken with his party over the conflict, supporting President Donald Trump’s decision to strike Iran in February and voting against a measure seeking to limit Trump’s war powers. His distance from Democrats was underscored last week when he made a surprise video appearance at Trump’s Republican midterm convention in Dallas.
Fetterman’s office did not immediately respond to a request for comment.
Senate Majority Leader John Thune and Georgia Gov. Brian Kemp will headline a fundraiser next week for Rep. Mike Collins, the state’s GOP Senate nominee, according to an invite obtained by Blue Light News.
The Sept. 24 event will be held in Atlanta, and it comes as public polling shows Collins trailing Democratic incumbent Sen. Jon Ossoff. Republicans have pushed to bring in more financial resources to close the gap in the top battleground.
Ossoff has repeatedly led Collins in candidate-level fundraising, but the Republican party committees and President Donald Trump’s MAGA Inc. super PAC combined hold a huge fundraising edge over the affiliated Democratic Party’s committees — which could potentially give Collins a boost.
The event, billed as a “roundtable and reception benefiting” Collins, could be a boon to Georgia Republicans, who have privately worried that party leaders are prioritizing other competitive Senate races, including in Michigan and Maine, as they look to defend the upper chamber.
Thune, as Senate GOP leader, is one of the party’s most prominent fundraisers. Kemp, meanwhile, has strong ties to Georgia and remains a popular figure in the state.
Collins’ campaign did not immediately respond to a request for comment.
“The party is closing ranks behind Mike Collins with two of the strongest fundraisers heading to Atlanta to help him,” said one person close to the Collins campaign, granted anonymity to speak candidly about the dynamics of the race. “That’s not the sign of a candidate in trouble, it’s the sign of a candidate — who has closed the race from 13 to 7 points while being outspent — getting air support to bring this thing home.”
Kemp — who initially backed former football coach Derek Dooley in the Senate GOP primary — endorsed Collins earlier this week.
The fundraiser will also feature Georgia’s first lady Marty Kemp.
House Minority Leader Hakeem Jeffries again declined to say how he will respond to two rebel Democrats who have twice bucked party leaders to advance the Republican floor agenda.
“As I repeatedly made clear, I’ll have more to say — we’ll have more to say — about the situation when we have more to say about the situation,” Jeffries said at a Thursday news conference with the No. 2 and 3 leaders, Katherine Clark of Massachusetts and Caucus Chair Pete Aguilar of California.
Clark suggested Wednesday that one of the rebels, Rep. Marie Gluesenkamp Perez of Washington, should lose her Appropriations Committee seat after the second break. After Gluesenkamp Perez and Jared Golden of Maine voted with Republicans earlier this month, Jeffries pledged a “serious response” that did not publicly materialize.
Standing beside Clark and Aguilar on Thursday, Jeffries said, “There is no daylight between the three of us, and we’ll address the situation when we address the situation.”
“The focus right now on taking back control of the House of Representatives,” he added. “That’s what the American people want to see — a dramatic change in this country because they are drowning.”
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