GOP bill would end Federal Reserve’s independence

The Federal Reserve is far too independent of the Congress and Treasury Department, Rep. Scott Garrett (R-N.J.) said Friday.

Garrett said that Republican-backed financial services regulation to give Congress veto power over the Fed’s actions would provide much-needed accountability to the monetary institution.

Garret said he wants to “end the ability of the Fed to act unilaterally, without any oversight by Congress or the Treasury,” during an interview with a conservative radio show.

“Congress and the Treasury should have a significant role in the saying of what the Fed does when they use taxpayer dollars that puts us on the hook,” he said.

Garrett’s proposal would amend the Federal Reserve Act, which sought to establish a central bank independent of the political branches of government, to subject the Fed to more oversight.

The GOP proposal would subject the Fed’s authority to act under “unusual and exigent” circumstances to Treasury approval, and give Congress the authority to veto actions in those situations.

The law would also put the Fed’s budget on the Treasury’s balance sheet, though the Fed is designed to be self-sustaining financially.