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Elon Musk said DOGE “should definitely” investigate after The Post’s exposé of the Fed’s $2.5 billion revamp of its Washington DC headquarters — a lavish project the Tesla titan called an “eyebrow raiser.”
The Post exclusively reported earlier this week how the Fed’s top brass were pushing ahead with the pricey renovations despite mounting losses on its balance sheet, catching the eye of President Trump’s austerity axeman-in-chief.
“Since at the end of the day, this is all taxpayer money, I think we certainly — we should definitely — look to see if indeed the Federal Reserve is spending two and a half billion dollars on their interior designer,” Musk told reporters at the White House on Wednesday, according to Bloomberg.
“That’s an eyebrow raiser,” he added.
The Post has approached DOGE and the White House for comment. A Federal Reserve spokesperson declined to comment.
Critics have compared the vanity project to the French monarchy’s Palace of Versailles, which has been hit by spiralling costs that are now effectively being paid by American taxpayers.
Central bank officials have long blamed the spiralling costs on a spike in the price of building materials and labor since the project started in 2021 amid rampant inflation under the Joe Biden administration.
Their initial estimate stood at $1.9 billion, with the work finally set to be completed in 2027. By comparison, JP Morgan is spending an estimated $3 billion on its new Park Avenue HQ in Midtown Manhattan.
The controversy also comes amid Trump’s long-running spat with Fed chair Jerome Powell over the speed of the central bank’s interest rate cuts, although he recently walked back his threats to try and force the 72-year-old out of the job.
The two men also disagree over the current administration’s decision to slap heavy tariffs on imported goods from abroad.
Sen. Rick Scott (R-Fla.) accused Powell of overseeing “a wildly unaccountable Fed that is wasting tax dollars.”
“Congress must hold him accountable,” he said.
Fellow GOP Sen. Cynthia Lummis (R-Wyo.), said America’s central bankers had displayed “arrogance” towards American taxpayers by pushing ahead with their pricey real estate plans.
“The Federal Reserve hasn’t earned a dime in years, but somehow found $2.5B to build a modern-day Palace of Versailles,” Lummis said, referring to the long-deposed French royal family’s residence just outside Paris.
“The whole project should be put on hold, if not permanently mothballed,” she added.
The overhaul, which was managed by Powell when he was a Fed governor, is focused on modernizing two downtown complexes on the Fed’s DC campus, known as the Eccles and FRB-East buildings.
Stressed-out Fed officials will be able to enjoy the new rooftop garden terraces, skylights, and ornate water features.
Meanwhile, board members are being handed a new elevator system that allows them to be dropped off directly in their VIP dining suite.
The Wall Street Journal revealed in March 2023 that its basement now hosts the Fed’s private art collection, while a pair of Italian beehives were installed on the roof.
The expensive makeover is controversial after the Fed posted operating losses of $77.5 billion last year.
That is still down from losses of $114.6 billion in 2023 when the central bank sank into the red for the first time in its more than 100-year history.
The Federal Reserve says the losses have not impacted its ability to operate and conduct monetary policy.
It sank into the red when interest costs surged and outstripped earnings on the bonds it owns when Powell hiked rates in trying to tame rising prices under Joe Biden.
When the Fed makes a profit, that money is then passed on to the US Treasury to become part of the federal government’s budget.
Its mounting losses, currently some $178 billion, are bundled together in what is known as the Fed’s “deferred asset.”
That amount must be completely paid before money transfers to the Treasury can resume and be spent on other things, such as defense, education, and Medicare.
A 2023 study by experts at the St Louis Fed predicted that it would not happen until mid-2027 at the earliest.
“No federal government institution should be able to build a Palace of Versailles for the exclusive use of its own officials,” said Andrew T. Levin, a professor of economics at Dartmouth College in New Hampshire.
“It’s imperative for Congress to investigate the Fed’s operating budget, salaries, and building upgrades,” he added.
English (US)