[Congressional Record Volume 160, Number 133 (Wednesday, September 17, 2014)]
[Extensions of Remarks]
[Pages E1430-E1431]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                FEDERAL RESERVE TRANSPARENCY ACT OF 2014

                                 ______
                                 

                               speech of

                           HON. MAXINE WATERS

                             of california

                    in the house of representatives

                      Tuesday, September 16, 2014

  Ms. WATERS. Mr. Speaker, I rise today in opposition to H.R. 24, a 
bill that would undermine the Federal Reserve's independence and 
politicize its monetary policy decision making.
  Mr. Speaker, this so called ``Federal Reserve Transparency Act'' has 
little to do with bringing transparency and accountability to the 
Federal Reserve. The truth is--this bill is nothing more than an effort 
to pressure and discourage the Fed from ever again being able to take 
the extraordinary action it has taken in recent years--action which has 
lowered unemployment, stabilized prices, and kept our economy from 
entering a second Great Depression.
  Mr. Speaker, the Federal Reserve is already subject to extensive 
transparency, oversight and disclosure requirements, including regular 
audits with limited exemptions.
  The fact is, since 1982 the Government Accountability Office has had 
the authority to audit the books of the Federal Reserve Board and the 
Federal Reserve Banks. And in 2009, as part of the Dodd-Frank Act, 
Congress required GAO to audit the emergency lending facilities created 
in response to the financial crisis. This has already been accomplished 
and the results of the audit are posted on the Federal Reserve's 
website.
  If that wasn't enough, the Board's financial statements are audited 
on an annual basis by an outside auditor--and the results are published 
in the Board's Annual Report.
  In addition to audits of its financial statements and emergency 
lending programs, the Federal Reserve provides comprehensive 
communication on monetary policy deliberations--releasing statements, 
publishing minutes and issuing transcripts following the completion of 
Federal Open Market Committee Meetings.
  Furthermore, since 2011 the Chairman of the Federal Reserve has held 
regular press conferences to discuss the outlook for the economy and 
explain the rationale for its Federal Reserve policy decisions.
  I find it baffling that we are here debating whether the Federal 
Reserve should be more open and transparent--even as Janet Yellen is 
scheduled to hold a press conference to discuss the outlook for 
monetary policy tomorrow afternoon.
  While the Fed's decisions are--and must continue to be--transparent, 
it is also imperative that monetary policy decision making remain 
insulated from short-term political pressures--in order to promote 
economic growth and keep inflation in check.
  But Mr. Speaker, this legislation would empower the GAO to 
investigate any and all policy decisions made by members of the Federal 
Reserve's rate setting committee, including decisions about when, and 
how, to unwind the Federal Reserve's ongoing stimulus program.
  Doing so would wipe out all of the statutory protections that ensure 
deliberations, decisions, and actions on monetary policy matters are 
shielded from second guessing.
  By empowering the GAO to challenge the decisions of Fed policy 
experts, and make legislative or administrative recommendations to the 
Congress, this measure aims to inject political pressure into monetary 
policy decisions--something that would undermine Fed's ability to make 
the tough--and sometimes unpopular--decisions that are necessary for 
the good of the economy.
  But this is not the Republican Majority's first politically motivated 
assault on the Federal

[[Page E1431]]

Reserve's independence. We've seen this time and again.
  Earlier this year Financial Services Committee Republicans took up 
and passed the ``FRAT Act'', a bill which virtually eliminates any 
discretion the Fed has to set monetary policy--by forcing it to make 
decisions in accordance with a mathematical formula and by requiring 
GAO to investigate any deviation from it--even in the case of changing 
economic conditions.
  Such absurd constraints on the Federal Reserve would inevitably 
increase uncertainty surrounding policy decisions, and decrease the 
public's confidence that the Fed can act appropriately in response to 
new economic realities.
  In closing I would reiterate that it is important for the American 
people to understand that these bills are not designed to address real 
problems, or a lack of transparency. Rather, the FRAT Act--and the bill 
before us today--are unnecessary.
  They will cause needless uncertainty and undermine the Fed's ability 
to conduct monetary policy in an independent manner.
  I urge my colleagues to oppose this legislation.

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