On Feb. 4, U.S. Congressman Marlin Stutzman, a member of the House Financial Services Committee, introduced the FFOCUS Act of 2013 (Focusing the Fed on the Currency of the United States), legislation to end the Federal Reserve’s “dual mandate” and force the Federal Reserve to pursue sound monetary policy.
“More than 12 million Americans are out of work but, instead of pursuing an aggressive pro-growth agenda, this administration is hoping the Federal Reserve will ‘solve’ the problem by firing up the printing presses,” Stutzman said. “Printing money is no substitute for sound job growth policies. Since 1978, the Federal Reserve’s contradictory dual mandate to fight unemployment and inflation has become a crutch for politicians who lack the courage to tackle the real problems.”
“After seeing three rounds of so-called quantitative easing, it’s clear that the Federal Reserve can’t print a path to prosperity,” Stutzman continued. “While the unemployment rate stays close to 8 percent, the Fed’s decision to purchase $85 billion in new assets each month is threatening the stability of the dollar. That’s why I’m introducing legislation to end the dual mandate once and for all.”
In 1978, Jimmy Carter signed the Full Employment and Balanced Growth Act (also known as the Humphrey-Hawkins Act). This legislation added full employment to the Federal Reserve’s statutory mandate to pursue price stability. In December 2012, the Fed publicly adopted a specific numerical target for unemployment, holding interest rates near zero until the unemployment rate falls below 6.5 percent. This bill would remove “maximum employment” from the mandate, focusing the Fed on managing the value of the world’s reserve currency, the U.S. dollar.