[Congressional Record Volume 140, Number 124 (Thursday, August 25, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 25, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
           SENATE RESOLUTION 253--RELATING TO MONETARY POLICY

  Mr. SIMON (for himself, Mr. Metzenbaum, Mr. DeConcini, and Mr. 
Bumpers) submitted the following resolution; which was referred to the 
Committee on Banking, Housing, and Urban Affairs:

                              S. Res. 253

       Whereas the Board of Governors of the Federal Reserve 
     System is legitimately concerned about the potential threat 
     of inflation;
       Whereas past Congresses and Presidents have compounded the 
     inflation problem by indexing many programs, contrary to the 
     advice of the economics experts of both parties;
       Whereas the Congress recognizes its own failure to follow 
     sound fiscal policies, thus making monetary policy even more 
     critical in controlling inflation;
       Whereas the Board of Governors of the Federal Reserve 
     System is an independent agency required by law to report to 
     the Congress, implying an advisory role for the Congress;
       Whereas higher interest rates can slow home construction 
     and reduce investment in industrial capacity, thereby 
     reducing the Nation's productivity;
       Whereas lower unemployment does not necessarily or 
     automatically lead to higher inflation, especially if low 
     unemployment is accompanied by higher productivity; and
       Whereas there is evidence that at the present time 
     inflation is not a serious threat to the Nation: Now, 
     therefore, be it
       Resolved, That it is the sense of the Senate that, in the 
     immediate future, it would be a mistake to raise interest 
     rates further, and that the Secretary of the Senate shall 
     transmit a copy of this resolution to the Board of Governors 
     of the Federal Reserve System.

 Mr. SIMON. Mr. President, earlier this month the Federal 
Reserve Board raised interest rates by a half percentage point, the 
fifth rate hike this year.
  While I understand the inflationary concerns that have led the 
Federal Reserve to act, I believe that any further increase in the near 
future would be excessive and unnecessary, posing a threat to the 
Nation's economic recovery. Consequently, I rise today, along with 
Senators Metzenbaum, DeConcini, and Bumpers, to offer the following 
measure, a sense-of-the-Senate resolution declaring that any additional 
rate increase in the near future would be unwise.

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