I 112th CONGRESS 1st Session H. R. 2990 IN THE HOUSE OF REPRESENTATIVES September 21, 2011 Mr. Kucinich (for himself and Mr. Conyers) introduced the following bill; which was referred to the Committee on Financial Services A BILL To create a full employment economy as a matter of national economic defense; to provide for public investment in capital infrastructure; to provide for reducing the cost of public investment; to retire public debt; to stabilize the Social Security retirement system; to restore the authority of Congress to create and regulate money, modernize and provide stability for the monetary system of the United States; and for other public purposes.

1.

Short title

This Act may be cited as the National Emergency Employment Defense Act of 2011.

2.

Findings; purposes

(a)

Findings

The Congress finds as follows: (1)Nearly 14,000,000 Americans are currently unemployed, another 12,000,000 estimated Americans are underemployed, wages are stagnant and millions of Americans are being asked to take pay cuts. (2)Over 43,000,000 Americans live below the poverty line, 49,000,000 of Americans go to bed hungry at night, and an estimated 3,000,000 Americans are homeless. (3)Over 1,500,000 non-business bankruptcies were filed in calendar year 2010, the highest number in five years, and the index of small business optimism is at a low not seen in nearly two decades. (4)More than 2,000,000 homes are in foreclosure and millions of homeowners are falling behind in their mortgage payments; the housing market in terms of construction and sales has undergone an historic decline; and the declining value of housing means Americans’ largest single investment, the home, is no longer a safe harbor for savings, nest eggs, social mobility or the transfer of generational wealth. (5)Notwithstanding passage of the Patient Protection and Affordable Care Act, a privatized health care system has made quality health care beyond the reach of most Americans. (6)The cost of higher education has put higher academic attainment outside the reach of millions more young Americans, and the current generation of young Americans will not be able to attain the quality of life of their parents, reversing a long-standing trend. (7)The American Society of Civil Engineers has estimated that there is $2.2 trillion in unmet infrastructure needs. Cities and States, urban and rural areas all have an urgent need to rebuild and repair roads, bridges, railroads, water systems, sewer systems and other infrastructure but lack the necessary funds, bond-issuing capacity and other needs which has led to America’s infrastructure falling into disrepair. (8)The Board of Governors of the Federal Reserve System have compounded the economic crisis by failing to take decisive action to move the economy forward, Wall Street, which was bailed out by the American people, is not investing its rising assets in Main Street America, and individual investors are beginning to turn away from the stock market. (9)Some banks, many of which received government bailouts, are not investing in small businesses, nor in the creation of jobs, the private sector is not creating jobs, and in fact most businesses are freezing their employment levels. (10)Congress is stymied by competing forces: a desire to put people to work and an aversion to borrowing money to create programs to do so. (11)Confidence in the United States’ economic leadership at home and around the world is waning, the value of our currency cannot be securely maintained, and no other path to economic recovery exists which will create the changes necessary to put people back to work, invest in rebuilding America’s infrastructure, i.e. highway, rail, airport, harbors, light rail, communication, shipping, water, sewer, education, and civil defense. (12)The aforementioned conditions require comprehensive action by the United States Congress to create full employment, invest in America and secure our Nation’s long-term economic, social and political future; and that such action is within our Constitutional right and responsibility. (13)The authority to create money is a sovereign power vested in the Congress under Article I, Section 8 of the Constitution. (14)The enactment of the Federal Reserve Act in 1913 by Congress effectively delegated the sovereign power to create money, to the Federal Reserve system and private financial industry. (15)This ceding of Constitutional power has contributed materially to a multitude of monetary and financial afflictions, including: (A)growing and unreasonable concentration of wealth; (B)unbridled expansion of national debt, both public and private; (C)excessive reliance on taxation of citizens for raising public revenues; (D)devaluation of the currency; (E)drastic increases in the cost of public infrastructure investments; (F)record levels of unemployment and underemployment; and (G)persistent erosion of the ability of Congress to exercise its Constitutional responsibilities to provide resources for the general welfare of all the American people. (16)A debt-based monetary system, where money comes into existence primarily through private bank lending, can neither create, nor sustain, a stable economic environment, but has proven to be a source of chronic financial instability and frequent crisis, as evidenced by the near collapse of the financial system in 2008. (17)Banks increased their value by lending money imprudently, which greatly inflated the value of bank holdings, exposing depositors and taxpayers to the risks of schemes like the bundling of subprime mortgages, and ultimately bringing undercapitalized banks and the entire financial system to the edge of ruin, creating circumstances where the taxpayers of the United States were called upon to save the banks from their own imprudent lending practices, misspending and mis-investments. The banks’ ability to create money out of nothing ultimately became the taxpayers’ liability, and raises a fundamental question about a practice of money creation which threatens the wealth of the American people. (18)Abolishing private money creation can be achieved with minimal disruption to current banking operations, regulation, and supervision. (19)The creation of money by private financial institutions as interest-bearing debts should cease once and for all. (20)Reclaiming the power of the Federal Government to originate money, and to spend or lend money into circulation as needed, eliminates the need to treat money as a Federal liability or to pay interest charges on the Nation’s money supply to financial institutions; it also removes the undue influence of private financial institutions over public policy. (21)Under the current Federal Reserve System, the persons responsible for the conduct of United States monetary policy have been unaccountable to the Congress and the Nation, have resisted auditing by the Government Accountability Office, and have claimed exemptions from some Federal statutes, including the Civil Rights Act of 1964, that apply to all agencies of the Federal Government. (22)The implementation of United States monetary policy by the Board of Governors of the Federal Reserve System has failed to promote full employment, and the failure of the Board of Governors to safeguard the financial system against wholesale fraud and abuse of citizens, demonstrates the risks of maintaining a system wherein the power to create and regulate money has been delegated to private individuals who are unaccountable to the People of the United States in any way, even through their representatives in Congress. (23)An examination of the historical record demonstrates that the exercise of control by the United States Government over the money system has provided greater moderation in the supply of money and promoting the general welfare, and has been indispensable in times of national emergency for generating resources required to support public investment, provide for national defense, and promote the general welfare, and is therefore superior to private control over the money system. (24)As our money system is a key pillar in maintaining general economic welfare and as the Federal Reserve System and its private banking partners has consistently failed to promote or preserve the general welfare, it is essential that Congress, in the name of protecting the economic lives of the American people and the long-term security of our Nation, reassume the powers and responsibilities granted to it by the Constitution. (b)

Purposes

The purposes of this Act are as follows: (1)To create a Monetary Authority which shall pursue a monetary policy based on the governing principle that the supply of money in circulation should not become inflationary nor deflationary in and of itself, but will be sufficient to allow goods and services to move freely in trade in a balanced manner. The Monetary Authority shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates. (2)To create a full employment economy as a matter of national economic defense; to provide for public investment in capital infrastructure; to provide for reducing the cost of public investment; to retire public debt; to stabilize the Social Security retirement system; to restore the authority of Congress to create and regulate money, to modernize and provide stability for the monetary system of the United States, and for other public purposes. (3)To abolish the creation of money, or purchasing power, by private persons through lending against deposits, by means of fractional reserve banking, or by any other means. (4)To enable the Federal Government to invest or lend new money into circulation as authorized by Congress and to provide means for public investment in capital infrastructure. (5)To incorporate the Federal Reserve System into the Executive Branch under the United States Treasury, and to make other provisions for reorganization of the Federal Reserve System. (6)To provide for an orderly transition. (7)To make other provisions necessary to accomplish the purposes of this Act.

3.

Definitions

(a)

In General

For purposes of this Act, the following definitions shall apply: (1)

Bureau

The term Bureau means the Bureau of the Federal Reserve established under section 314 of title 31, United States Code, as added by section 303. (2)

Deposit

The term deposit— (A)has the meaning given such term in section 3(l) of the Federal Deposit Insurance Act); and (B)includes— (i)a member account (as defined in section 101(5) of the Federal Credit Union Act) in a credit union; and (ii)any transaction account. (3)

Depository institution

The term depository institution— (A)has the same meaning as in section 3 of the Federal Deposit Insurance Act; and (B)includes any credit union (as defined in section 101 of the Federal Credit Union Act). (4)

Instrument of indebtedness of the united states; treasury instruments

The terms instrument of indebtedness of the United States and Treasury instrument include any obligation issued under subchapter I of chapter 31 of title 31, United States Code. (5)

Member bank

The term member bank has the same meaning as in the first section of the Federal Reserve Act. (6)

Money

The term money refers to United States Money, as established under title I. (7)

Monetary authority

The term Monetary Authority means the Monetary Authority established under section 302. (8)

Secretary

The term Secretary means the Secretary of the Treasury. (9)

State

The term State has the same meaning as in section 3 of the Federal Deposit Insurance Act. (10)

Effective date

The term effective date means the date determined and published in the Federal Register by the Secretary, during the 90-day period beginning on the date of the enactment of this Act, that— (A)is not less than 1 year after such date of enactment and not more than 2 years after such date; and (B)is the date on which the designated provisions of this Act take effect. (b)

Technical and Conforming Amendment to the FDIA

Section 3(l) of the Federal Deposit Insurance Act (12 U.S.C. 1813(l)) is amended by adding at the end the following: Such term does not include any amount on which any interest is paid or which is received or held by a bank or savings association pursuant to a loan agreement for a fixed term of time (as determined without regard to any designation on the agreement as a loan, certificate, or other particular instrument). .

4.

Coordination with other law

(a)

In General

This Act shall supersede any provision of Federal law in effect on the day before the date of the enactment of this Act that is inconsistent with any provision of this Act but only to the extent of such inconsistency. (b)

Technical and Conforming Amendments

Before the end of the 6-month period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall submit to the Congress a proposed draft of legislation of the Monetary Authority that, if enacted, would implement such technical and conforming amendments as the Monetary Authority may recommend— (1)to repeal the provisions of law referred to in subsection (a) that are inconsistent with this Act; and (2)to further clarify and implement the provisions of this Act.