U.S. Representative Kevin Brady (R-TX), chairman of the U.S. Congress Joint Economic Committee, today re-introduced the Sound Dollar Act to reform the Federal Reserve. He also introduced the Centennial Monetary Commission Act which - on the 100th anniversary of the Federal Reserve - establishes a national bi-partisan commission to review the institution's conduct of monetary policy over the past century and make recommendations to Congress on its future role.
"In order to preserve the strongest economy in the world throughout the 21st Century, we need to get the role of the Federal Reserve right," Brady said. "A sound dollar is the best foundation for creating jobs and growing America's economy. And, frankly, keeping prices stable over the long term is truly the only outcome that monetary policy can impact."
The Sound Dollar Act, which has 51original sponsors in the House, focuses the Fed on a single mandate of price stability to grow the economy, imposes credit neutrality on the Fed by limiting future purchases to U.S. treasuries except in emergencies and expands the voting membership of the Federal Open Market Committee to all 12 regional presidents to ensure all voices of the U.S. economy are heard.
"We need to make sure that the Federal Reserve is representing the interests of the entire nation, not just those of Washington and Wall Street."
Other reforms include speeding the public release of FOMC transcripts from five years to three, closing the Exchange Rate Stabilization slush fund and returning $50 billion to the U.S. treasury and placing the new Consumer Financial Protection Bureau back under regular congressional funding and oversight.
"A Fed independent of political interference is critical. Since subsidies die hard in Washington,it's important to limit future Fed purchases to U.S. treasuries, remove the politically charged CFPB from Fed funding and make sure the entire U.S. economy is represented in decisions regarding open market actions," said Brady.
Of the monetary commission, which Brady is introducing with representatives Jim Jordan of Ohio and Marcia Blackburn of Tennessee, "The purpose is to conduct a full and objective evaluation of the Federal Reserve System with an eye to making recommendations to modernize the Federal Reserve and its operations. Since this year marks the 100th anniversary of the creation of the Federal Reserve System, it's the right time to examine the Federal Reserve and our monetary system to make sure they're operating in the best interests of the nation."