WASHINGTON — Sen. David Vitter is trying to limit the power of the Federal Reserve and keep the nation’s central banking system focused on price stability.
Vitter, R-La., teamed with Sen. Bob Corker, R-Tenn., this week to file legislation that would end the Federal Reserve’s so-called “dual mandate” that also requires the banking system to focus on lowering unemployment. The Federal Reserve System oversees the nation’s banking systems.
While the legislation is not expected to go far in the Democratic-controlled Senate, it does keep the issue in the national discussion.
“I’ve long argued that the Fed should just focus on inflation,” Vitter said in the announcement. “With endless stimulus-type initiatives coming out of the Fed and the money printing press never ending — all under the banner of helping boost employment — the Federal Reserve should get back to its original goal. This policy strives to do just that.”
Corker also was critical of the Federal Reserve’s “bipolar mandate,” while touting their Federal Reserve Single Mandate Act of 2013.
“Providing the Fed with a clear and explicit focus on keeping inflation low will serve America better than the broad, bipolar mandate it has today,” Corker said. “The dual mandate blurs the line between fiscal and monetary policy and allows Congress to shirk its responsibility to enact sound budgets and policies that produce economic growth.”
Corker argued the Federal Reserve has used its “maximum employment” charge to purchase nearly $3 trillion in federal assets by buying U.S. debts in order to spur short-term stability and growth.