Yesterday, Congressman Bill Huizenga (MI-02) delivered the House Financial Services Committee's Sunday Video Message on H.R. 5018, the Federal Reserve Accountability and Transparency Act. H.R. 5018 was introduced by Rep. Huizenga and Rep. Scott Garrett (NJ-05) last week. Additionally, the Financial Services Committee held a hearing this past Thursday on H.R. 5018 urging the Fed to adopt a rules-based approach to monetary policy, increase transparency, and restore accountability.
Transcript:
Over the past several years, the Federal Reserve has gained unprecedented power, influence, and control over the financial system while remaining shrouded in mystery to the American people.
This standard operating procedure cannot continue. We must lift this veil of secrecy and ensure that the Fed is accountable to the people's representatives.
That is why last week; my colleague Scott Garrett and I introduced H.R. 5018, the Federal Reserve Accountability and Transparency Act. This legislation will start to pull back the curtain at the Fed and increase accountability and transparency by doing such things as: limiting Fed officials 'blackout periods' to discuss policy with Congress, opening the rulemaking process, and requiring the Fed to provide a cost-benefit analysis for every regulation that it issues.
The Dodd-Frank Act bestowed massive new regulatory authority upon the Federal Reserve. Yet the Fed is not required to conduct cost-benefit analyses when it considers new regulations, unlike all the other financial regulators such as the SEC and CFTC.
Additionally, this legislation urges the Fed to adopt a 'rules-based' approach to monetary policy instead of the continued ad-hoc strategy currently being employed. Should the Fed fail to adopt a 'rules-based' approach, it would trigger an audit of the Fed's books.
Economists across the ideological spectrum have called upon the Fed to set this kind of monetary policy according to a mathematical rule that uses economic data such as the rates of inflation and unemployment, and to share that rule with the public.
We cannot have such a power entity within the federal government operating on a whim. This legislation codifies the commonsense principle of using a rules-based approach when determining monetary policy.
It's time to bring the Federal Reserve out of the Shadows and provide hardworking taxpayers with a more open and transparent government.
Additional information on H.R. 5018 can be found here.
