U.S. Representative Mike Pence, chairman of the House Republican Conference, said he plans to introduce a bill tomorrow that would end the Federal Reserve’s dual mandate, forcing the central bank to focus on inflation.
“The Fed’s dual mandate has failed,” Pence, of Indiana, said in a statement. The central bank is currently required by a 1977 amendment to the Federal Reserve Act to promote stable prices and full employment. Matt Lloyd, communications director for the conference, said in an e-mail that Pence intends the bill to be considered in the current lame-duck session of Congress.
The Fed’s Nov. 3 decision to buy $600 billion of Treasuries in a bid to reduce unemployment is being criticized by officials in China, Germany, and Brazil, as well as U.S. economists John Taylor and Michael Boskin. Pence joined the critics today, saying the Fed’s second round of quantitative easing will monetize the U.S. government’s debt and ignite inflation.
“It’s time for the Fed to be solely focused on price stability and not the recently announced QE2,” said the 51- year-old lawmaker.
Democrats still control both houses during the lame-duck session that began today. Republicans gained at least 60 House seats in the Nov. 2 election, enabling the party to seize a majority in the chamber in January. Republicans gained six seats in the Senate, trimming the Democrats’ control to 53-47.
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