May 17 2012
Utah Senator Says Time for Fed to Stop Delving into Fiscal Policy, Implement Exit Strategy From Its Intervention into Economy
A strong proponent of bringing increased transparency, accountability and restraint to the Federal Reserve, U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, today opposed the nominations of Jeremy Stein and Jerome Powell to serve on the Federal Reserve Board, citing concern that the Fed has gone beyond its mission by delving too far into fiscal policy, which is the jurisdiction of Congress, and failed to provide an exit strategy from its intervention into the economy.
“As I recently told Fed Chairman Bernanke, I’m concerned that Fed’s extraordinary interventions into the economy have blurred the distinction between monetary and fiscal policy. Fiscal policy must be solely controlled by the legislative branch, not unelected Federal Reserve Board members. I opposed these two nominees today, because the Fed has not sufficiently addressed these concerns. It’s essential that the Federal Reserve Board outline a concrete plan to re-establish a proper distinction between monetary and fiscal policy,” said Hatch.
Earlier this year, Hatch sent Fed Chairman Ben Bernanke a letter criticizing a Federal Reserve white paper that offered recommendations to Congress on how to use taxpayer resources to address issues in the ailing housing market, for treading “…too far into fiscal policy advice and advocacy.”
“The Fed hasn’t explained how it would implement an exit strategy away from its extraordinary interventions into the economy. We need a Federal Reserve Board with a clear vision of what the Fed’s role in the financial system and the economy should and should not be. It should not be in the businesses of going with the flow of ballooning its already massive balance sheet,” Hatch continued. “It’s time for the Fed to stop expanding its already outsized role in our markets, economy, housing sector, and government debt markets.”
Furthermore, Hatch backs legislation, the Federal Reserve Transparency Act, that would require a full and complete audit of the Federal Reserve system by the Comptroller General of the United States.