LEESBURG, Va. — Federal Reserve Chair Jerome H. Powell gently asserted his independence from President Trump in a private meeting with House Democrats on Thursday night, declaring that political identification and pressures have little bearing on his decisions as head of the nation’s fiscal overseer, according to multiple people in the room.
Speaking at the House Democratic Caucus retreat, Powell told Democrats about how he viewed his role as Fed leader as apolitical in overseeing the nation’s economy. Politics, he said, don’t influence his decisions on when to raise interest rates.
“We’re strictly nonpartisan,” Powell said. “We check our political identification at the door.”
Powell’s comments come amid attacks on him by Trump, who nominated him to his current position. Trump has blasted Powell for raising interest rates four times last year, suggesting those moves have jeopardized economic gains that have boomed on his watch.
Last year, Trump floated the idea of firing Powell, two people familiar with the exchanges told The Washington Post.
While he shied away from policy questions almost the entire evening, Powell said it would be “unthinkable” that the United States would default on its debt ceiling payments — a comment some took as a warning not to play chicken with the nation’s credit.
Powell also noted that no other country has a debt limit — they simply appropriate money — echoing an argument often made by lawmakers who want to eliminate the U.S. debt ceiling, including many Democrats.
Those comments come just months before the Treasury Department is expected to run out of money to pay creditors, a deadline that will require Trump and House Speaker Nancy Pelosi (D-Calif.) to put together a bipartisan agreement to avert a default that could result in downgrading the country’s credit rating.
Those negotiations have yet to take off. But Trump in the past has heeded the advice of hard-liners in his party’s right flank, including agreeing to shut down the government for 35 days last December. Many of those same hard-liners have championed debt ceiling standoffs before.
Democratic leaders applauded Powell on Thursday night for his assertion of independence, even though he dodged their questions about Trump.
“Powell has made it unambiguously clear that he views his role, rightfully, as nonpartisan,” House Majority Leader Steny H. Hoyer (D-Md.) said in his remarks introducing Powell. “Since his confirmation on a bipartisan 84-13 vote in January 2018, Chairman Powell has made ensuring the independence of the Federal Reserve a centerpiece of his leadership. That is a view we share.”
He added: “From time to time in its 103 years, the Federal Reserve has stood up to challenges to its independence from political considerations and the influence of either the President or Congress. That’s a good thing, and it’s a fundamental principle that both the President and Congress ought to uphold for the sake of economic stability.”
Some Democrats tried to lecture Powell, according to people in the room. Rep. Joyce Beatty (D-Ohio), who leads the House Financial Services subcommittee on oversight and investigations and moderated the conversation, cut off lawmakers trying to filibuster.
One, Rep. Brad Sherman (D-Calif.), encouraged Powell to maintain the Fed’s balance sheet, which grew during the 2008 financial crisis and now generates tens of billions of dollars of yearly surplus. Many lawmakers and economists have urged the institution to instead unload those assets.
Rep. Gwen Moore (D-Wis.) asked Powell about the earned income tax credit for low-income earners, as well as minimum wage, a question that comes as House Democrats are trying to pass legislation increasing the minimum wage to $15.
Powell responded that the EITC worked to create “widely shared” economic prosperity, but mostly he didn’t comment on fiscal policy, saying in his opening remarks that it’s “really not our job.”
“We are highly transparent in what we’re doing and why we’re doing it. We have an obligation to explain that,” he said.
Powell also would not comment on Trump’s decision to nominate failed 2012 presidential hopeful Herman Cain and conservative economist Stephen Moore to join him on the Federal Reserve. Rep. Carolyn B. Maloney (D-N.Y.) asked about the president appointing “two spectacularly unqualified candidates” and whether they would be controlled by the president. Powell responded, “I don’t comment on nominees.”
“We wait for the nomination process to work,” he said .
At the end of the evening, Pelosi thanked Powell for staying independent from Trump’s political pressure and even choosing not to answer certain questions by her own members. When she inquired after his own global views of the Federal Reserve and the American economy, he replied that the United States needs to maintain its leadership, a comment some in the room saw as a rebuke of Trump’s increasingly isolated approach to foreign policy.
“American leadership is the gold standard for the postwar period,” Powell said. “We designed the post-World War II architecture of democracy” and must continue in that position.
Correction: An earlier version of this story mischaracterized comments made by Rep. Brad Sherman (D-Calif.). He did not, in the course of questioning Powell, criticize the size of the Federal Reserve balance sheet but rather argued that it ought to be maintained. The story has been corrected.