[Congressional Record Volume 140, Number 121 (Monday, August 22, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 22, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       THE FEDERAL RESERVE BOARD

  Mr. DORGAN. Mr. President, the crime bill is going to cost something 
in the neighborhood of $30 billion, give or take, over an extended 
period of time. I noted last Friday, talking about money, that this 
Government will experience another set of costs--far greater than that 
$30 billion--caused by actions of the Federal Reserve Board. Is it not 
interesting that we debate at great length spending of tens of billions 
of dollars on something we desperately need, a bill to put resources 
together to fight crime, and there is no debate and no thoughtful 
discussion on what the Federal Reserve Board has done in the last 6 
months?
  I wonder if my colleagues know in the five interest rate increases in 
6 months by the Federal Reserve Board--in which they went in a room, 
locked the door, and made decisions in secret to increase interest 
rates five times--what they have done is increase Federal spending by 
$110 billion between now and 1999 by increasing the cost of funding our 
debt? No debate; no lengthy discussions; the Federal Reserve Board 
secretly goes in a room and makes the decision. In fact, most of the 
folks in that room have their banking connections and I am sure they 
represent them well--and they decided to increase interest rates five 
times. It will increase the cost of borrowing for the Federal 
Government, in effect increase spending by the Federal Government, $110 
billion between now and 1999.
  One of my colleagues on the other side says, ``If the Federal Reserve 
Board protected us against a wave of inflation that was going to come 
in the future and extended this country's economic recovery, that would 
be a bargain.'' Does anybody in this Chamber have any credible evidence 
that there is inflation over the horizon? That inflation is on the 
rise? There is no evidence I am aware of. Inflation has decreased for 3 
successive years. There is no evidence of renewed inflation. Yet the 
Federal Reserve Board has taken action to increase interest rates five 
successive times. What they have done is put the brakes on the American 
economy.
  I brought their pictures to the floor of the Senate several times 
because I think, even though they operate in secret, we ought to at 
least share with the American people who these folks are and what they 
look like. I hope one day soon we can address the question of whether 
we ought to have a Federal Reserve Board under these circumstances 
making these kinds of decisions with this consequence to the American 
economy and to the American people.

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