On Wednesday, the House Financial Services Committee passed H.R. 3189, the Fed Oversight Reform and Modernization (FORM) Act introduced by Congressman Bill Huizenga by a vote of 33 to 25. Rep. Huizenga’s legislation reforms the Federal Reserve by making the institution more accountable and transparent to the American people.
“With the Federal Reserve having more power and responsibility than ever before, it is imperative the Fed changes its opaque structure and becomes more transparent and accountable to the American people,” said Monetary Policy & Trade Subcommittee Chairman Bill Huizenga (R-MI). “The Fed’s recent high degree of discretion and its lack of transparency in how it conducts monetary policy demonstrate that not only are reforms needed, but more importantly that reforms are necessary. We need to modernize the Federal Reserve and bring it into the 21st Century.”
Among several reforms, the legislation requires the Federal Reserve to transparently communicate its monetary policy decisions to the American people. The FORM Act requires the Fed to generate a monetary policy strategy of its own choosing in order to provide added transparency about the factors leading to its monetary policy decisions.
By requiring the Fed to regularly communicate how its policy choices compare to a benchmark rule, the FORM Act helps consumers and investors make better decisions in the present and form better expectations about the future. These improvements are important for Americans to enjoy greater economic opportunity. By pursuing this expansion through increased transparency instead of policy mandates, the FORM Act further insulates the Fed from political pressures.
The FORM Act also:
Requires the Federal Reserve to conduct cost-benefit analysis when it adopts new rules
Requires transparency about the Federal Reserve’s bank stress tests and about international financial regulatory negotiations conducted by the Federal Reserve, Treasury Department, Office of the Comptroller of the Currency, Securities and Exchange Commission, and Federal Deposit Insurance Corporation.
Requires the Federal Reserve to disclose the salaries of highly paid employees, provides for at least two staff positions to advise each member of the Board of Governors, and requires Fed employees to abide by the same ethical requirements as other federal financial regulators.
Clarifies the “blackout period” governing when Federal Reserve Governors and employees may publicly speak on certain matters; provides for a more balanced representation of voters on the Federal Open Market Committee (FOMC); and provides additional assurances that the Federal Reserve’s emergency lending powers are used only in emergencies.
Requires the full FOMC to decide policy rates on excess balances maintained at a Federal Reserve Bank by a depository institution.
Removes restrictions placed on the Government Accountability Office’s ability to audit the Federal Reserve, directs the GAO to conduct an audit of the Federal Reserve within 12 months of enactment and requires the GAO to report to Congress within 90 days of completion of the audit.
A section by section break down of the legislation is available here and the full legislative text is available to read here.
Last week, a report was issued by the The United States Department of Justice IG's Office detailing how Federal Prison Industries (FPI), which is owned and operated by the federal government and uses labor from inmates, produced faulty military helmets that led to the recall of over 126,000 helmets and cost taxpayers $19 million. It’s bad enough that FPI takes jobs away from hardworking Americans, now it has been proven they cut corners and jeopardized the lives of our men and women in uniform. FPI actively undermines the free market. The federal government should not be using prison labor to manufacture critical lifesaving military equipment when there are private sector options available and law-abiding citizens looking for work. Back in March, I introduced H.R. 4671 - the Small Business Protection Act to shed light on FPI, end their no-bid contract status, strengthen small businesses, and force FPI to compete against the private sector. Read the bill here: http://huizenga.house.gov/uploadedfiles/bill_text_-_hr_4671_-_the_small_business_protection_act.pdf
Thankfully there are no reported injuries from yesterday's devastating storms and tornado. If you are in the Wyoming area and need assistance, the Red Cross will be passing out relief kits that include tarps and other repair items starting at 1PM today at Gladiola Elementary School. The school is located at 3500 Gladiola Ave. SW. Thank you to our community leaders and first responders who have done a tremendous job of clearing roadways, ensuring the safety of west Michigan residents, and keeping the public informed.
Thank you Jill for all of your hard work helping West Michigan residents this summer. I am glad your internship in Grandville further developed your interest in public service. We really enjoyed having you as part of the team. I hope you enjoy your senior year at Grand Valley!
This morning on 1450 WHTC Holland's News Leader I discussed the latest disturbing example of bureaucrats at the VA putting themselves and their scorecard ahead of the health of veterans. The bipartisan CHOICE Act was passed by Congress and signed by President Obama to help alleviate circumstances such as these. It is completely unacceptable for the VA to force veterans and their families to travel long distances to centralized transplant centers or withhold transplant services claiming that only VA can provide the care associated with a transplant. It is preposterous, and frankly unconscionable for the VA to use ridiculous excuses such as “the donor is not a veteran." The VA has multiple programs to pay for this type of care in the community when necessary, it’s just refusing to use them.
Innovative ideas are taking hold across a variety of different fields throughout Michigan. For example, it is incredible to see how agricultural startups are taking urban farming to the next level in Detroit by creating new jobs, improving access to fresh and nutritious foods, and revitalizing areas of the city that have sat vacant.