[Congressional Record Volume 146, Number 8 (Thursday, February 3, 2000)]
[Senate]
[Pages S305-S308]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 NOMINATION OF ALAN GREENSPAN TO BE CHAIRMAN OF BOARD OF GOVERNORS OF 
                  THE FEDERAL RESERVE SYSTEM--Resumed

  The PRESIDING OFFICER. The Senate will resume consideration of the 
nomination, which the clerk will report.
  The legislative clerk read the nomination of Alan Greenspan, of New 
York, to be Chairman of the Board of Governors of the Federal Reserve 
System.
 Mr. HAGEL. Mr. President, I strongly support Alan Greenspan's 
nomination to a fourth term as Chairman of the Board of Governors of 
the Federal Reserve System. While Congress and the President continue 
to claim credit for our strong economy and projected budget surpluses, 
one person truly deserves the nation's gratitude for this unprecedented 
economic expansion--that is Alan Greenspan. His tenure has been a 
spectacular success.
  Chairman Greenspan's decisions regarding monetary policy have helped 
lead us to low unemployment, low interest rates and the longest period 
of sustained economic growth in the nation's history. Given his 
remarkable record, it is easy to forget that circumstances have not 
always been this good for him. Chairman Greenspan has also been tested 
by periods of adversity during his tenure at the Federal Reserve. 
Immediately following the October 1987 crash on Wall Street, Chairman 
Greenspan worked with money center banks to ensure that the brokerage 
firms continued to have the liquidity necessary to calm both markets 
and investors. Even in times of adversity, his was a steady hand.
  Last year, during debate on the financial modernization legislation, 
Chairman Greenspan served as a crucial advisor to the Members of the 
Conference Committee. He added indispensable expertise to enacting 
legislation

[[Page S306]]

that will help maintain the competitiveness of our financial services 
industry in a global economy while ensuring the safety and soundness of 
our financial markets.
  Unfortunately, I will not be present for the full Senate vote on the 
Chairman's nomination. I have the responsibility of leading a 
bipartisan congressional delegation to Wehrkunde, the annual world 
security conference in Munich, Germany and to Moscow, where we are to 
meet with acting Russian President Vladimir Putin.
  I voted for Chairman Greenspan's nomination during the Banking 
Committee's markup and would vote for his renomination before the full 
Senate had I been present. I urge all my colleagues to do the 
same.
  Mr. KOHL. Mr. President, I strongly support Alan Greenspan's 
renomination to Chair the Federal Reserve Board for a fourth term.
  The United States is currently enjoying the longest period of 
economic growth in our history, with price stability and record low 
unemployment. Welfare rolls have been dramatically reduced, and we have 
more Americans in homes of their own and invested in the burgeoning 
stock market than ever before.
  As Chairman of the Federal Reserve Board for the past 12 years, Dr. 
Greenspan deserves no small amount of the credit for this unprecedented 
growth and prosperity. Chairman Greenspan has consistently steered 
American monetary policy on a prudent and responsible course. He has 
won the respect and confidence of policymakers, the financial services 
industry and the American people. Indeed, we have witnessed that Alan 
Greenspan's words alone have the potential to trigger fluctuations on 
the global markets. Commendably, Chairman Greenspan has also upheld a 
high standard of evenhanded, apolitical management of our nation's 
money supply. And last year, Chairman Greenspan played a critical 
leadership role in the passage of the Financial Services Modernization 
Law to expand the market powers and competitiveness of our financial 
institutions, while lowering fees and promoting financial product 
innovation to the benefit of all Americans.
  And this strong economy has coincided with fiscal discipline on our 
part, rather than the deficit spending of the past. The Federal budget 
is balanced, and, this year, we will hopefully take continued steps to 
retire more of the $5 trillion national debt. As Chairman Greenspan has 
advised, retiring the debt is one of the most important steps we can 
take to promote continued economic growth and plan for the future 
financial challenges of the aging of the baby boomer generation. There 
is room for tax cuts. There is room to increase spending on important 
domestic priorities, but debt reduction should remain a centerpiece of 
our economic agenda.
  We can be confident that Alan Greenspan will continue providing vital 
leadership of monetary policy toward our common goal of keeping the 
economy robust. Considering his past record and looking to the future, 
he deserves reappointment, and I urge my colleagues to support his 
renomination.
  Mr. HATCH. Mr. President, I rise today to express my strong support 
for the confirmation of Alan Greenspan to a fourth term as Chairman of 
the Board of Governors of the Federal Reserve.
  Mr. President, our economy has just completed its 107th month of 
expansion--a record period of growth in peacetime or war in our Nation. 
Our economy is the marvel of the world, and for good reason. The 
unemployment rate is at a record low, and the Gross Domestic Product 
grew at a rate of almost 6 percent in the second half of 1999.
  Despite this low unemployment and high growth, factors that can 
typically bring about strong inflation, inflation has been kept in 
check. Part of the reason for this is due to increases in productivity, 
which resulted in large part from the pro-growth economic policies of 
the 1980s as well as stunning technological advances.
  These technological advances are revolutionizing the way America does 
business and are changing the face of our economy. Some are calling it 
a ``new economy,'' because it seems to defy some of the conventional 
forces that shaped the economy in the past. Some are going so far as to 
suggest that the economic cycle may be dead and that we do not need to 
worry as much about these old forces.
  Now that the economy has surpassed all previous records of growth, 
there are signs that it is perhaps overheating. Yesterday, the Federal 
Open Market Committee and the Federal Reserve, under the leadership of 
Chairman Greenspan, raised the federal funds and the discount rates as 
a further measure to counter this possible overheating. Some are 
criticizing these moves, saying they are unnecessary and that the ``new 
economy'' does not need the same kind of restraint as did the old.
  But, Mr. President, I would certainly be cautious about second-
guessing the wisdom of Alan Greenspan. Over the past 13 years, Alan 
Greenspan has been the voice of steady reason and common sense for our 
monetary policy. His policies have shown prescience, and his 
stewardship has been confident and strong. Chairman Greenspan has been 
the voice of common sense that the financial markets listen to and 
respect. I believe we are indeed fortunate to have had the services of 
Chairman Greenspan over the past 13 years, and I commend the President 
for reappointing him to this key post. I am greatly pleased and 
relieved that he is willing to serve another term. We need his 
experience. We need his wisdom. And we need his continuing steady hand 
at the helm of our monetary policy.
  Whether or not we truly have a new economy that will continue to defy 
traditional forces, I don't know. But I am very pleased that Alan 
Greenspan is here to guide us and I enthusiastically support his 
confirmation and urge my colleagues to do the same.
  Mr. FEINGOLD. Mr. President, I will vote to confirm the nomination of 
Alan Greenspan to another term as Chairman of the Federal Reserve Board 
of Governors. While I continue to have some concerns about some of the 
day-to-day management of the Federal Reserve System, he has helped 
sustain a period of economic growth that few would have predicted a few 
years ago.
  Mr. President, when I first ran for the U.S. Senate in 1992, my 
highest priority was reducing the Federal budget deficit. In 1992, that 
deficit stood at $340 billion. This past fiscal year, we balanced the 
budget. That is an enormous achievement, and it was due to the tough 
fiscal policies of Congress, particularly the 1993 deficit reduction 
package, and Chairman Greenspan stewardship at the Federal Reserve. 
Both were integral to our economy's growth and to the resulting 
improvement in our budget picture, and I credit Chairman Greenspan for 
his part in that effort.
  I do want to make clear that I have some continuing concerns 
regarding the Federal Reserve, concerns that stem in part from a 1996 
General Accounting Office report which reviewed the Federal Reserve 
System. Noting that there were no strong external forces to minimize 
Federal Reserve costs, the report identified weaknesses in existing 
oversight and budgetary processes which resulted in a number of 
troubling issues. The GAO found a $4 billion cash reserve known as a 
Surplus Account that the Federal Reserve exempted from its policy of 
returning all its net profits to the Treasury. The report found 
evidence from its policy of returning all its net profits to the 
Treasury. The report found evidence of inefficiencies and excessive 
spending, and specifically identified the construction of a Federal 
Reserve Bank as well as overly generous travel, salaries, and employee 
benefits.
  The report noted at least one major instance, the construction of the 
Dallas Federal Reserve Bank, in which the Federal Reserve missed an 
opportunity to save money, including the purchase of unnecessary land 
at the cost of $7 million.
  The GAO also reported that some employees had home security systems 
installed by the Federal Reserve, costing from $2,500 to $8,000, while 
others had home-to-work transportation using Federal Reserve vehicles. 
And the GAO found Federal Reserve travel expenses had risen by nearly 
67 percent between 1988 and 1994, from $28.5 million in 1988 to $47 
million in 1994, compared to only 26 percent for the Federal 
government.
  Mr. President, it should be noted that the Federal Reserve did 
respond to the GAO findings by establishing annual audits of their 
Reserve banks, and I credit that action.

[[Page S307]]

  Those annual audits have since been codified, along with annual 
audits of the Federal Reserve Board and the Federal Reserve System by a 
provision added to the financial modernization bill, the Gramm-Leach-
Bliley Act. That audit provision was added to the financial 
modernization bill by the Senator from Nevada (Mr. Reid) and the 
Senator from North Dakota (Mr. Dorgan). They have been vigilant on this 
matter, and in fact they were the original requesters of the 1996 GAO 
report.
  The Reid-Dorgan audit requirements are an important step, and I am 
greatly encouraged by it, but we should go further. I feel strongly 
that we should ask the GAO to update its 1996 report on the Federal 
Reserve, and hope Chairman Greenspan will join in such a request.
  We cannot have a complete understanding of current management 
practices at the Fed until we hear from the GAO again on this matter, 
however, I am willing to give Chairman Greenspan the benefit of the 
doubt. The audit requirements added to the Gramm-Leach-Bliley Act do 
represent an improvement, and I was encouraged by the modest step taken 
by the Fed in response to the 1996 GAO report.
  Mr. President, I opposed this nomination four years ago, and I very 
much look forward to a needed update of the GAO audit of the Federal 
Reserve. However, given his remarkable record in helping to sustain the 
economic growth of the past several years and in the improvement in our 
budget picture, I will vote to confirm Chairman Greenspan.
  Mr. DASCHLE. Mr. President, a couple of days ago marked the longest 
economic expansion in U.S. history: 107 months. Alan Greenspan deserves 
credit for coordinating closely with the administration foster that 
growth.
  Mr. Greespan has been described as a master of the art of monetary 
policy. He has certainly learned and grown in office. His renomination 
deserves our full support.
  President Clinton renominated Chairman Greenspan for two reasons: Our 
unprecedented record of economic success; and his ability to coordinate 
Fed monetary policy with our fiscal policy.
  Those two reasons are, in fact, inseparable. It is the marriage of 
fiscal and monetary policy that created and has sustained current 
economic expansion. This successful working partnership has worked 
despite his being a lifelong Republican--though we would gladly welcome 
him as a Democrat.
  The best illustration of Mr. Greenspan's ability to coordinate 
closely with administration is the 1993 economic plan. Mr. Greenspan 
signaled that if the new President attacked the deficit aggressively, 
it would produce lower interest rates. The President followed that 
advice. A Democratic Congress passed that plan.
  As a result, we have gone from the biggest budget deficits in U.S. 
history to the biggest surplus. Largely as a result of the 1993 
economic plan, we now have the lowest interest rates since WWII. We 
have created more than 20 million new jobs. Unemployment is at the 
lowest level in 30 years. The poverty rate is the lowest in two 
decades. Homeownership is at an all-time high. Real wages have grown 
faster and longer than at any time in more than two decades.
  What is most remarkable is that we have achieved all of this while 
keeping inflation under control: 2.7% inflation last year. It used to 
be an article of faith among many conservative economists that you had 
to have at least 6% unemployment or you would trigger inflation. 
Chairman Greesnpan had the courage to challenge that orthodoxy and 
prove it wrong. The result is millions of people are working today who 
would not have had jobs under the old rules.
  He has done so without sacrificing his commitment to taming inflation 
and has succeeded in maintaining record low inflation.
  We should confirm Chairman Greenspan for a fourth term as Fed 
Chairman. We should also continue to uphold our end of the partnership. 
We have confidence Chairman Greenspan will continue to exercise strong 
monetary leadership. We should commit ourselves to continuing to 
exercise strong fiscal discipline.
  People sometimes find Chairman Greenspan's messages a little 
difficult to decipher. They tend to look for shades of meaning in his 
statements. But on the question of our national debt, he has been 
absolutely clear and unequivocal. He has said over and over: We must 
pay down the debt. Huge new tax cuts or excessive Government spending 
could destroy our prosperity. He could not be clearer on that point.
  We need to listen to Chairman Greenspan. Many inside this Congress--
and outside--are now seizing on new surplus estimates from the 
Congressional Budget Office to justify massive new tax breaks. Their 
plans stand in direct contradiction to Chairman Greenspan's advice to 
us. Their plans represent a total abdication of the fiscal discipline 
that has helped get us to this point.
  Our best first use of the surplus is not to pay for an election-year 
tax cut. It is to pay down the debt. That will enable us to protect 
this economic recovery today and protect Social Security and Medicare 
tomorrow.
  We support tax cuts to help working families with real, pressing 
needs like child care and college tuition. We support tax cuts to help 
working families care for sick and aging relatives. We support 
eliminating the marriage penalty tax.
  The American people have made it clear that these are the kinds of 
tax cuts we should aim for: tax cuts that expand our prosperity, not 
undermine it; that help all Americans, not just a privileged few. We 
should listen to them. But we also share Mr. Greenspan's view that the 
best tax cut for America's families and businesses is to pay down the 
debt. This year because of the progress we have made since 1993 in 
eliminating the deficit and reducing the debt, the average American 
family will save: $2,000 on its mortgage; $200 on its car loan; and 
$200 more on student loans.
  Shortly after it was clear the Asian ``flu''--the Asian monetary 
crisis--had been successfully contained, Time magazine ran a cover 
story. The picture on the cover showed Alan Greenspan and, standing 
behind him, Bob Rubin and Larry Summers. The headline read: ``The 
Committee that Saved the World: The inside story of how the Three 
Marketeers * * * prevented a global economic meltdown.''
  That is strong praise and it is deserved. Chairman Greenspan, working 
with this Administration, has earned our vote of confidence. I am proud 
to cast my vote in support of is renomination.
  Mr. President, I am very pleased that this nomination is before us, 
and I am hopeful that we will see an overwhelming vote in favor of Alan 
Greenspan this morning. We have made remarkable progress in this 
economy and in our country, in large measure because of the marriage 
between fiscal and monetary policy.
  That monetary policy was created because of the leadership of 
Chairman Greenspan. He has been a leader not only in creating monetary 
policy but in setting the tone for this country as we make some 
difficult choices in our fiscal policy.
  He has said to all of us we need to be very prudent in making 
decisions about how we spend our surplus, about how we manage our 
budget, about the commitments we make to tax cuts we cannot afford, 
about the importance of paying off the debt and bringing long-lasting 
fiscal responsibility by eliminating the public debt.
  That kind of advice is advice we all ought to take. It is the kind of 
advice that has given us the longest economic expansion in history. It 
is an expansion that ought to be continued for years and years to come. 
It will if we follow the advice of Alan Greenspan. It will if we keep 
this marriage of fiscal and monetary policy. It will if we pay off the 
debt and do what we should to ensure the fiscal prudence we have 
demonstrated in our budgets over the last couple of years.
  I very enthusiastically endorse this nomination and hope that on a 
bipartisan basis we can provide the kind of vote of confidence this 
Chairman deserves.
  I yield the floor.
  Mr. THOMAS. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is, Will the Senate advise and consent to the nomination 
of

[[Page S308]]

Alan Greenspan, of New York, to be Chairman of the Board of Governors 
of the Federal Reserve System? The clerk will call the roll.
  The bill clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Montana (Mr. Burns), 
the Senator from Arizona (Mr. McCain), the Senator from Nebraska (Mr. 
Hagel), the Senator from Alaska (Mr. Stevens), and the Senator from 
Arizona (Mr. Kyl) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Montana (Mr. Burns) would vote ``yea.''
  Mr REID. I announce that the Senator from California (Mrs. Boxer) and 
the Senator from Rhode Island (Mr. Reed) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Rhode Island (Mr. Reed) would vote ``aye.''
  The PRESIDING OFFICER (Mr. Allard) Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 89, nays 4, as follows:

                       [Rollcall Vote No. 6 Ex.]

                                YEAS--89

     Abraham
     Akaka
     Allard
     Ashcroft
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Breaux
     Brownback
     Bryan
     Bunning
     Byrd
     Campbell
     Chafee, L.
     Cleland
     Cochran
     Collins
     Conrad
     Coverdell
     Craig
     Crapo
     Daschle
     DeWine
     Dodd
     Domenici
     Durbin
     Edwards
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Helms
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     Mack
     McConnell
     Mikulski
     Moynihan
     Murkowski
     Murray
     Nickles
     Robb
     Roberts
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner
     Wyden

                                NAYS--4

     Dorgan
     Harkin
     Reid
     Wellstone

                             NOT VOTING--7

     Boxer
     Burns
     Hagel
     Kyl
     McCain
     Reed
     Stevens
  The nomination was confirmed.
  The PRESIDING OFFICER. Under the previous order, the President will 
be notified of the confirmation.

                          ____________________