Democrats and Republicans wrangled in a hearing over the role the Federal Reserve should play. Rep. Ron Paul, R-Texas, and House Republicans called for reining in the Fed, while Democrats contended that the Fed is tied too closely to the financial industry.
Contending that it "makes no sense for Congress to charge the Federal Reserve to control what it cannot," Rep. Kevin Brady, R-Texas, introduced a bill to limit the Fed's mandate to price stability. Democrats have criticized the bill and requested a hearing.
All 27 Democrats on the House Financial Services Committee have requested a hearing on a proposal to eliminate the Federal Reserve's employment focus. Rep. Kevin Brady, R-Texas, is expected to introduce a bill this week to change the Fed's focus to only price stability. The Fed's dual mandate has "been helpful in dealing with our unemployment problem," lawmakers wrote in the letter to Rep. Spencer Bachus, R-Ala., the committee's chairman.
Rep. Kevin Brady, R-Texas, is planning to introduce a bill that would strip the Federal Reserve of its mandate to battle inflation. The Sound Dollar Act would limit the types of bonds the Fed could purchase, possibly forcing sales of mortgage-backed securities sooner than expected.
Rep. Kevin Brady, R-Texas, is planning to introduce legislation that would strip the Federal Reserve from its mandate to promote maximum employment. Instead, the central bank would focus on battling inflation and protecting the value of the dollar. Brady said his bill is intended to "maintain the purchasing power of the dollar in order to foster long-term economic growth and stability."