[Congressional Record Volume 145, Number 113 (Wednesday, August 4, 1999)]
[Senate]
[Pages S10234-S10235]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MACK (for himself, Mr. Abraham, Mr. Allard, Mr. Bennett, 
        Mr. Brownback, Mr. Hagel, Mr. Helms, and Mr. Shelby):
  S. 1492. A bill to require the Board of Governors of the Federal 
Reserve System to focus on price stability in establishing monetary 
policy to ensure the stable, long-term purchasing power of the 
currency, to repeal the Full Employment and Balanced Growth Act of 
1978, and for other purposes; to the Committee on Banking, Housing, and 
Urban Affairs.


            economic growth and price stability act of 1999

 Mr. MACK. Mr. President, I ask that the text of the bill be 
printed in the Record.
  The bill follows:

                                S. 1492

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Economic Growth and Price 
     Stability Act of 1999''.

     SEC. 2. FINDINGS; STATEMENT OF POLICY.

       (a) Findings.--The Congress finds that--
       (1) during periods of inflation, the United States has 
     experienced a deterioration in its potential economic growth;
       (2) a decline in inflation has been a crucial factor in 
     encouraging recent robust economic growth;
       (3) stable prices facilitate higher sustainable levels of 
     economic growth, investment, and job creation;
       (4) the multiple policy goals of the Full Employment and 
     Balanced Growth Act of 1978 cause confusion and ambiguity 
     about the appropriate role and aims of monetary policy, which 
     can add to volatility in economic activity and financial 
     markets, harming economic growth and costing workers jobs;
       (5) recognizing the dangers of inflation and the 
     appropriate role of monetary policy, political leaders in 
     countries throughout the world have directed the central 
     banks of those countries to institute reforms that focus 
     monetary policy on the single objective of price stability, 
     rather than on multiple policy goals;
       (6) there is a need for the Congress to clarify the proper 
     role of the Board of Governors of the Federal Reserve System 
     in economic policymaking, in order to achieve the best 
     environment for long-term economic growth and job creation; 
     and
       (7) because price stability is a key condition for 
     maintaining the highest possible levels of productivity, real 
     incomes, living standards, employment, and global 
     competitiveness, price stability should be the primary long-
     term goal of the Board of Governors of the Federal Reserve 
     System.
       (b) Statement of Policy.--It is the policy of the United 
     States that--
       (1) the principal economic responsibilities of the 
     Government are to establish and ensure an environment that is 
     conducive to both long-term economic growth and increases in 
     living standards, by establishing and maintaining free 
     markets, low taxes, respect for private property, and the 
     stable, long-term purchasing power of the United States 
     currency; and
       (2) the primary long-term goal of the Board of Governors of 
     the Federal Reserve System (hereafter in this Act referred to 
     as the ``Board'') should be to promote price stability.

     SEC. 3. MONETARY POLICY.

       (a) Amendment to the Federal Reserve Act.--Section 2A of 
     the Federal Reserve Act (12 U.S.C. 225a) is amended to read 
     as follows:

     ``SEC. 2A. MONETARY POLICY.

       ``(a) Price Stability.--The Board and the Federal Open 
     Market Committee (hereafter in this section referred to as 
     the `Committee') shall--
       ``(1) establish an explicit numerical definition of the 
     term `price stability'; and
       ``(2) maintain a monetary policy that effectively promotes 
     long-term price stability.
       ``(b) Congressional Consultation.--Not later than February 
     20 and July 20 of each year, the Board shall consult with the 
     Congress at semiannual hearings before the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Banking and Financial Services of the House of 
     Representatives, about the objectives and plans of the Board 
     and the Committee with respect to achieving and maintaining 
     price stability.
       ``(c) Congressional Oversight.--The Board shall, concurrent 
     with each semiannual hearing required by subsection (b), 
     submit a written report to the Congress containing--
       ``(1) numerical measures to help assess the extent to which 
     the Board and the Committee are achieving and maintaining 
     price stability in accordance with subsection (a);
       ``(2) a description of the intermediate variables used by 
     the Board to gauge the prospects for achieving the objective 
     of price stability; and
       ``(3) the definition, or any modifications thereto, of 
     `price stability' established in accordance with subsection 
     (a)(1).''.
       (b) Compliance Estimate.--
       (1) In general.--Concurrent with the first semiannual 
     hearing required by section 2A(b) of the Federal Reserve Act 
     (as amended by subsection (a) of this section) following the 
     date of enactment of this Act, the Board shall submit to the 
     Congress a written estimate of the length of time it will 
     take for the Board and the Committee to fully achieve price 
     stability. The Board and the Committee shall take into 
     account any potential short-term effects on employment and 
     output in complying with the goal of price stability.
       (2) Definitions.--For purposes of this section--
       (A) the term ``Board'' means the Board of Governors of the 
     Federal Reserve System; and
       (B) the term ``Committee'' means the Federal Open Market 
     Committee.

     SEC. 4. REPEAL OF OBSOLETE PROVISIONS.

       (a) Full Employment and Balanced Growth Act of 1978.--The 
     Full Employment and Balanced Growth Act of 1978 (15 U.S.C. 
     3101 et seq.) is repealed.
       (b) Employment Act of 1946.--The Employment Act of 1946 (15 
     U.S.C. 1021 et seq.) is amended--
       (1) in section 3 (15 U.S.C. 1022)--
       (A) in the section heading, by striking ``and short-term 
     economic goals and policies'';
       (B) by striking ``(a)''; and
       (C) by striking ``in accord with section 11(c) of this 
     Act'' and all that follows through the end of the section and 
     inserting ``in accordance with section 5(c).'';
       (2) in section 9(b) (15 U.S.C. 1022f(b)), by striking ``, 
     the Full Employment and Balanced Growth Act of 1978,'';
       (3) in section 10 (15 U.S.C. 1023)--
       (A) in subsection (a), by striking ``in the light of the 
     policy declared in section 2'';
       (B) in subsection (e)(1), by striking ``section 9'' and 
     inserting ``section 3''; and
       (C) in the matter immediately following paragraph (2) of 
     subsection (e), by striking ``and the Full Employment and 
     Balanced Growth Act of 1978'';
       (4) by striking section 2;
       (5) by striking sections 4 through 8; and
       (6) by redesignating sections 3, 9, 10, and 11 as sections 
     2 through 5, respectively.
       (c) Congressional Budget Act of 1974.--Title III of the 
     Congressional Budget Act of 1974 (2 U.S.C. 631 et seq.) is 
     amended--
       (1) in section 301--
       (A) in subsection (b), by striking paragraph (1) and 
     redesignating paragraphs (2) through (9) as paragraphs (1) 
     through (8), respectively;
       (B) in subsection (d), in the second sentence, by striking 
     ``the fiscal policy'' and all that follows through the end of 
     the sentence and inserting ``fiscal policy.'';
       (C) in subsection (e)(1), in the second sentence, by 
     striking ``as to short-term and medium-term goals''; and
       (D) by striking subsection (f) and inserting the following:
       ``(f) [Reserved.]''; and
       (2) in section 305--
       (A) in subsection (a)(3), by inserting before the period at 
     the end ``, as described in section 2 of the Economic Growth 
     and Price Stability Act of 1999'';
       (B) in subsection (a)(4)--
       (i) by striking ``House sets forth the economic goals'' and 
     all that follows through ``designed to achieve,'' and 
     inserting ``House of Representatives sets forth the economic 
     goals and policies, as described in section 2 of the Economic 
     Growth and Price Stability Act of 1999,''; and
       (ii) by striking ``such goals,'' and all that follows 
     through the end of the paragraph and inserting ``such goals 
     and policies.'';

[[Page S10235]]

       (C) in subsection (b)(3), by inserting before the period at 
     the end ``, as described in section 2 of the Economic Growth 
     and Price Stability Act of 1999''; and
       (D) in subsection (b)(4)--
       (i) by striking ``goals (as'' and all that follows through 
     ``designed to achieve,'' and inserting ``goals and policies, 
     as described in section 2 of the Economic Growth and Price 
     Stability Act of 1999,''; and
       (ii) by striking ``such goals,'' and all that follows 
     through the end of the paragraph and inserting ``such goals 
     and policies.''.
                                 ______