Fed Oversight Reform And Modernization Act of 2015

Floor Speech

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Mr. Chairman, as the ranking member of the Monetary Policy and Trade Subcommittee, I rise in strong opposition to H.R. 3189.

Sometimes you can disagree on a bill, and it doesn't really make much difference. But this bill is extremely dangerous for many reasons. I want to focus on just two provisions--my time is limited--that would be absolutely disastrous for the U.S. economy:

One is the political audits of the Federal Reserve.

And, second, the computer model monetary policy, so-called Taylor rule.

Now, people think, well, what is wrong with auditing the Fed? The Fed is already audited, including an external audit, which all Americans can review online. This bill creates a mechanism for political audits of the Fed. Injecting politics into monetary policy and undermining the independence of the Central Bank would be an absolute disaster.

I am thinking just recently of the transportation bill that we passed out of here--and I voted for it, hoping that it can be fixed in conference--where the Fed is required to provide $60 billion--that is billion with a B, Mr. Chairman--and then is not being allowed to replenish its money supply. This is more than just tinkering in our economy.

There is overwhelming evidence and academic research that demonstrated an independent central bank anywhere in the world making economic decisions and not political decisions delivers lower inflation, higher employment, and better economic results.

Currently, the U.S. enjoys low borrowing costs, and our debt is considered the gold standard. The U.S. dollar is literally the reserve currency of countries around the world.

If adopted, this bill would potentially undermine the exalted status of U.S. debt.

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