Incoming House Commerce Chairman Opposes Fed Buying $600 Billion in Govt Debt
(CNSNews.com) -- Rep. Joe Barton (R-Tex.), slated to be chairman of the House Energy & Commerce Committee in the next Congress, said he opposes the Federal Reserve’s plan to purchase $600-billion in federal government debt (through Treasury bonds), but does not know if Congress can do anything to stop the Fed. He also said he is not prepared to call for the Fed chairman’s resignation over the issue.
The Federal Reserve announced last week that it would purchase the longer-term Treasury securities over the next seven months as a means to keep interest rates as low as possible and provide banks with more currency reserves that they can then loan to customers to ostensibly stimulate economic growth.
“I would not support what the Federal Reserve is doing,” said Rep. Barton during a press conference at the conservative Heritage Foundation on Wednesday. “As to what we can do in the Congress, the Federal Reserve is an independent agency. They have to report to the Congress. I’m not certain what we could do to prevent what they’re doing.”
While Barton was unequivocal in his opposition to the move, he said he would not call for the resignation of Federal Reserve Chairman Ben Bernanke.
“I’m not prepared to do that at this moment,” said Barton. “I do respect him and, to my knowledge, the Federal Reserve under his leadership has not overstepped its authority so I don’t think there’s a reason to call for his resignation.”
Barton has been in Congress since 1985. He is expected to become the Chairman of the House Energy & Commerce Committee when Republicans take over the House of Representatives in January.
Concerning the move by the Fed, Rep. Mike Pence (R-Ind.) last week said that it is “diluting the value of the dollar by continually increasing the supply of money,” which “poses an incalculable risk.”
“Instead, Congress needs to embrace pro-growth fiscal policies to stimulate our economy rather than masking our fundamental problems by artificially creating inflation,” said Pence. “The American people deserve a government that protects the purchasing power of the dollar.”
Rep. Paul Ryan (R-Wisc.), the incoming House Budget Committee chairman, said on Fox News Sunday that the Fed’s action is “a big mistake. Look, we have Congress doing tax and spend, borrow and spend. Now we have the Federal Reserve doing print and spend.”
“We already have very loose monetary policy, very, very low interest rates,” said Ryan. “This is going to give us an inflation problem in the future. It's going to give us an interest rate problem in the future. It is destabilizing investment horizons.”
A transcript of CNSNews.com’s exchange with Rep. Barton follows below:
CNSNews.com: “The federal reserve has just announced that it will be buying $600 billion dollars worth of Treasury bonds. Congressman Paul Ryan says that this pretty much amounts to just printing money to spend. Do you support this and, if not, is there anything the Republican Congress can do about it when they come to power?”
Rep. Barton: “Well, I’m with Paul Ryan. He has to be nominated and confirmed to the conference to be chairman of the Budget Committee but, to my knowledge, he doesn’t have an opponent so I hope that happens.
“I would not support what the Federal Reserve is doing. As to what we can do in the Congress, the Federal Reserve is an independent agency. They have to report to the Congress. I’m not certain what we could do to prevent what they’re doing.
“They certainly have the authority under current law to do it. What we could do to counteract that, I’m not enough of a constitutional expert to be able to comment.”
CNSNews.com: “If this happens, would you possibly call for the resignation of Mr. Bernanke?”
Rep. Barton: “I’m not prepared to do that at this moment. I do respect him and to my knowledge the Federal Reserve under his leadership has not overstepped its authority, so I don’t think there’s a reason to call for his resignation.”
“I do think it’s an inappropriate policy and I’d certainly support some sort of sense of the Congress resolution against it.”