Katie Grant, 202-225-3130
WASHINGTON, DC - House Democratic Whip Steny H. Hoyer (MD) spoke on the House Floor today in opposition to H.R. 459, the Federal Reserve Transparency Act. Below are his remarks and a link to the video:
Click here to watch the video.
“Mr. Speaker, when the sponsors of the bill talk about auditing the Federal Reserve, they don't mean a traditional audit. An outside independent accounting firm already audits the Federal Reserve’s annual financial statements, and the GAO is already empowered to review the Fed’s financial statements and a broad range of its functions.
In fact, the Wall Street Reform legislation Democrats passed last Congress expanded the types of audits GAO can conduct. So there is transparency and accountability when it comes to the Federal Reserve's finances and operations. However, this bill would instead jeopardize the Fed's independence by subjecting its decisions on interest rates and monetary policy to GAO audit.
“The Fed, like every other major central bank in the world, is independent, and Congress has rightly insulated the Fed from short-term political pressures. I agree with Chairman Bernanke that Congressional review of the Fed's monetary policy decisions would be a “nightmarish scenario,” especially judging by the track record of this Congress when it comes to governing effectively and intervening in the courts and other areas. We don't have to look further than the Congress unnecessarily taking the country to the brink of default last summer in a display of politics.
“All of us, Mr. Speaker, want transparency. All of us here want to make sure that the Federal Reserve is working to carry out the economic goals of the American people, which are maximum employment and price stability, but that's not what this bill is about. This bill increases the likelihood that the Fed will make decisions based on political rather than economic considerations, and that is not a recipe for sound monetary policy.
“I urge my colleagues to defeat this bill and preserve the independence of the Fed so it can keep our currency stable and cultivate the best conditions for our economy to grow and create jobs. Unfortunately, Mr. Speaker, we in Congress have shown too frequently our inability in a political environment to make tough choices. That failure has led us, in part, to where we are today. I urge my colleagues to defeat this unwarranted, unjustified and dangerous legislation.”