Friday
Jul102009
House Committee Questions Fed Member On Fed’s Expansion
By Learned Foote- Talk Radio News Service
On Thursday, the House Financial Services Committee questioned Federal Reserve Board Vice Chairman Donald Kohn regarding a proposal recently advanced by the Obama administration that would expand the powers of the Fed.
The Fed currently oversees monetary policy, and in 1977 Congress established that the agency's objectives are to maximize employment and stabilize prices.
The expanded powers would grant the Fed the authority to oversee systemic risks to the financial system as a whole. Said Kohn, “the job of the systemic risk regulator would be to take account of those interrelationships, the markets and how they’re developing, and the institutions and how they fit into the markets, and look at the overall risk to the system, as well as the risk of the individual institution.”
He added that the Federal Reserve could fulfill this role.
Some Congressmen argued that the expanded powers could compromise the Fed’s responsibilities regarding monetary policy.
Rep. Spencer Bachus (R-Ala.) said that the House Republicans’ view of the Federal Reserve dramatically differed from that of the administration. “Republicans believe that the Fed’s core mission, and I stress this, is to conduct monetary policy, and that that will be seriously undermined if its supervisory responsibilities are dramatically expanded.” He suggested that the Fed could become a “permanent bail-out agency,” and its political independence could be compromised.
“We need to end the bailouts that the Fed I think has been instrumental in carrying out over the last eighteen months, and I mean the ad hoc bailouts of individual institutions.”
Kohn said “we do not believe that enhancements to our existing supervisory and regulatory authority proposed by the administration would undermine our ability to pursue our monetary policy objectives effectively and independently.”
Rep. Ron Paul (R-Texas), who has introduced a bill in the House to audit the Fed more thoroughly, expressed skepticism as to whether the Fed’s powers should be expanded. He said that the Fed needs to be more transparent, although Kohn argued that “our independence in the conduct of monetary policy is accompanied by substantial accountability and transparency.”
Congressman Al Green (D-Texas) asked the Vice Chairman how he would respond to those who argue that it is “risky to give the Fed this much power.” Kohn replied that the additional powers are “incremental...not a huge increase in our authority.” He emphasized that “for the authority we already have, we are held accountable.”
On Thursday, the House Financial Services Committee questioned Federal Reserve Board Vice Chairman Donald Kohn regarding a proposal recently advanced by the Obama administration that would expand the powers of the Fed.
The Fed currently oversees monetary policy, and in 1977 Congress established that the agency's objectives are to maximize employment and stabilize prices.
The expanded powers would grant the Fed the authority to oversee systemic risks to the financial system as a whole. Said Kohn, “the job of the systemic risk regulator would be to take account of those interrelationships, the markets and how they’re developing, and the institutions and how they fit into the markets, and look at the overall risk to the system, as well as the risk of the individual institution.”
He added that the Federal Reserve could fulfill this role.
Some Congressmen argued that the expanded powers could compromise the Fed’s responsibilities regarding monetary policy.
Rep. Spencer Bachus (R-Ala.) said that the House Republicans’ view of the Federal Reserve dramatically differed from that of the administration. “Republicans believe that the Fed’s core mission, and I stress this, is to conduct monetary policy, and that that will be seriously undermined if its supervisory responsibilities are dramatically expanded.” He suggested that the Fed could become a “permanent bail-out agency,” and its political independence could be compromised.
“We need to end the bailouts that the Fed I think has been instrumental in carrying out over the last eighteen months, and I mean the ad hoc bailouts of individual institutions.”
Kohn said “we do not believe that enhancements to our existing supervisory and regulatory authority proposed by the administration would undermine our ability to pursue our monetary policy objectives effectively and independently.”
Rep. Ron Paul (R-Texas), who has introduced a bill in the House to audit the Fed more thoroughly, expressed skepticism as to whether the Fed’s powers should be expanded. He said that the Fed needs to be more transparent, although Kohn argued that “our independence in the conduct of monetary policy is accompanied by substantial accountability and transparency.”
Congressman Al Green (D-Texas) asked the Vice Chairman how he would respond to those who argue that it is “risky to give the Fed this much power.” Kohn replied that the additional powers are “incremental...not a huge increase in our authority.” He emphasized that “for the authority we already have, we are held accountable.”
House Dems Heading To Alabama To Shed Light On Immigration Law
By Andrea Salazar
House Democrats will be visiting Alabama Nov. 21 to bring attention to the effects the state’s immigration law has had on the Latino community.
Rep. Luis Gutierrez (D-Ill.), a stark opponent of the Alabama law, considered the strictest immigration law in the country, is leading the effort. Acknowledging that he does not expect any immigration measure to make it to the House or Senate floors before the next election, the congressman said the Alabama visit is to raise awareness.
“The more light you shed on the abusive anti-immigrant law of Alabama, the more likelihood there is that you’re going to defeat it,” Gutierrez said at a news conference Thursday. “We’re going there to say that we came to listen and in listening also to ask you what it is you would like us to do as we return to the Congress of the United States.”
HB56, the Alabama immigration law, requires schools to find out students’ immigration status and calls on police to check a person’s status during stops or arrests if there’s “reasonable suspicion” that the person is in the country unlawfully.
Rep. Terri Sewell (D-Ala.) is welcoming her colleagues to Alabama and calling on her state to play the role it did during the civil rights movement.
“So many of the injustices that this nation has faced have been addressed on the ground in Alabama, and once again I believe that we in Alabama will lead the way with making sure we get a federal immigration policy and not a piecemeal state by state effort,” Sewell said.
Gutierrez emphasized that all visiting representatives would be spending their own money to pay for the trip. To that effect, Rep. Charlie Gonzalez (D-Texas) said they were making the trip because immigration is an issue that affects everyone.
“If the law does not protect you today, it will not protect me tomorrow,” Gonzalez said. “We all have an interest in this.”
Pointing out that the author of the Arizona immigration law, Russell Pearce, was recalled in a special election this past month, Rep. Raul Grijalva (D-Ariz.), warned politicians to take immigration seriously.
“That recall better be a harbinger for a lot of politicians that it’s time you took this issue of immigration in a serious way,” Grijalva said. “Look at comprehensive reform in a federal level and quit using people in their communities - Alabama, Arizona and others - as a whipping boy for a political advantage.”
Reps. Joe Baca (D-Calif.), Yvette D. Clarke (D-N.Y.), Al Green (D-Texas), Zoe Lofgren (D-Calif.), Grace Napolitano (D-Calif.) and Silvestre Reyes (D-Texas) will join Gutierrez, Grijalva, Gonzalez and Sewell in Alabama on Monday where they will hold a field hearing and attend the launch of a campaign to repeal the Arizona immigration law.