The Federal Reserve’s relationship with Congress is growing more complicated as lawmakers second-guess its decisions and look to impose reforms.
On Monday, the Fed will again face congressional scrutiny, as Rep. Kevin Brady (R-Texas) unveils a sweeping bill aimed at limiting what actions the Fed can take. The legislation from Brady, the vice chairman of the Joint Economic Committee who also holds a top spot on the Ways and Means Committee, is the latest in a series of bills in the 112th Congress aimed at reworking the central bank.
While libertarian firebrand Rep. Ron Paul (R-Texas) is most associated with Fed scrutiny, members of both parties have begun to second-guess how the Fed conducts its business. On the left, Sen. Bernie Sanders (I-Vt.) has emerged as a vociferous critic.
“It’s a funny development,” said Barry Bosworth, an economist with the Brookings Institution. “Historically, I would not have thought that there was a lot of antagonism between the Congress and the Federal Reserve.”
A major reason for the heightened scrutiny is the financial crisis, experts say. When the Fed stepped in and took unprecedented steps to keep the financial system afloat, the breadth of its power seems to have caught lawmakers off guard.