Tags: janet yellen | federal reserve | republican | political bias

Yellen Defends Fed Against Republican Charges of Political Bias

Wednesday, 25 February 2015 02:23 PM

Janet Yellen defended the Federal Reserve against accusations that it’s politically partial to the Obama administration and liberal groups during heated exchanges with Republican members of Congress.

“The Federal Reserve is independent,” the central bank chair told the House Financial Services Committee on Wednesday in response to a question about her regular meetings with Treasury Secretary Jacob J. Lew. “I do not discuss monetary policy or actions we are going to take with the secretary.”

William Huizenga, a Michigan Republican, asked Yellen about her opposition to a proposal to subject the central bank’s monetary policy decisions to regular audits by the Government Accountability Office. Yellen opposes the measure, saying it would threaten the Fed’s independence.

“Shouldn’t we be equally concerned about threats posed by executive interference?” Huizenga asked. “It’s my understanding that you hold weekly or near weekly” meetings with Lew.

Representative Scott Garrett, a New Jersey Republican, weighed in with examples of what he said were the Fed’s involvement in politics, including a meeting with President Barack Obama at the White House before Election Day, and later in November with labor and community organizers.

“You’ve already made monetary policy a partisan political exercise,” Garrett said.

Yellen called Garrett’s comments a “complete mischaracterization” of her meetings, saying that “we meet with a wide range of groups.” She cited one scheduled for Friday with American Principles in Action, which says it’s dedicated to preserving the “universal principles of America’s founding.”

‘Critically Important’

“It is obviously critically important that the Federal Reserve be accountable to Congress,” Yellen said. “We are accountable to Congress.”

Michael Capuano, a Democrat from Massachusetts, came to Yellen’s defense. Echoing a line from the film “Casablanca,” he said he was “shocked, shocked” that Yellen meets with the president and is concerned about issues such as income inequality.

In testimony before the Senate Banking Committee Tuesday, Yellen strongly criticized the audit proposal, sponsored by Senator Rand Paul of Kentucky, a potential presidential contender.

“Central bank independence in conducting monetary policy is considered a best practice around the world,” Yellen said Tuesday.“Beyond a shadow of a doubt, independent central banks perform better.”

Republicans, who now control both chambers of Congress for the first time in eight years, have proposed bills to put the Fed under more scrutiny.

Garrett’s proposed Federal Reserve Transparency and Accountability Act would require it to perform a cost-benefit analysis of any new banking rule, submit internal audits and performance reviews to Congress and send a top official to testify before lawmakers on financial rule-making.

© Copyright 2020 Bloomberg News. All rights reserved.


   
1Like our page
2Share
Personal-Finance
Janet Yellen defended the Federal Reserve against accusations that it's politically partial to the Obama administration and liberal groups during heated exchanges with Republican members of Congress."The Federal Reserve is independent," the central bank chair told the House...
janet yellen, federal reserve, republican, political bias
418
2015-23-25
Wednesday, 25 February 2015 02:23 PM
Newsmax Media, Inc.
 
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved