[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
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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.
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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
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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.
____________________