I

103D CONGRESS

1ST SESSION H. R. 587

To modernize the Federal Reserve System and to provide for prompt

disclosure of certain decisions of the Federal Open Market Committee.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 26, 1993

Mr. HAMILTON (for himself and Mr. OBEY) introduced the following bill;

which was referred jointly to the Committees on Banking, Finance and

Urban Affairs and Government Operations

A BILL

To modernize the Federal Reserve System and to provide

for prompt disclosure of certain decisions of the Federal

Open Market Committee.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Federal Reserve Re5 form Act of 1993’’.
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1 SEC. 2. CONSULTATION BETWEEN FEDERAL OPEN MARKET

2 COMMITTEE AND THE SECRETARY OF THE

3 TREASURY, THE DIRECTOR OF THE OMB, AND

4 THE CHAIRMAN OF THE CEA.

5 Section 2A of the Federal Reserve Act (12 U.S.C.

6 225a) is amended—

7 (1) in the first sentence, by striking ‘‘The

8 Board of Governors’’ and inserting ‘‘(a) IN GEN9 ERAL.—The Board of Governors’’; and

10 (2) by adding at the end the following new sub11 section:

12 ‘‘(b) CONSULTATION REQUIRED.—The Federal Open

13 Market Committee shall meet and consult with the Sec14 retary of the Treasury, the Director of the Office of Man15 agement and Budget, and the chairman of the Council of

16 Economic Advisors—

17 ‘‘(1) during the 30-day period immediately pre18 ceding the date on which each report required under

19 the second sentence of subsection (a) is submitted to

20 the Congress by the Board of Governors; and

21 ‘‘(2) during the 30-day period beginning on the

22 date which is 100 days immediately preceding the

23 date by which the President is required to submit

24 the budget under section 1105(a) of title 31, United

25 States Code.’’.
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1 SEC. 3. APPOINTMENT OF THE CHAIRMAN AND VICE

2 CHAIRMAN.

3 (a) APPOINTMENT OF THE CHAIRMAN AND VICE

4 CHAIRMAN.—The second paragraph of section 10 of the

5 Federal Reserve Act (12 U.S.C. 242) is amended by strik6 ing the third sentence and inserting the following: ‘‘The

7 President shall appoint, by and with the advice and con8 sent of the Senate, one member of the Board to serve as

9 Chairman. The term of such member as Chairman shall

10 expire on January 31 of the first calendar year beginning

11 after the end of the term of the President who appointed

12 such member as Chairman. If a member appointed as

13 Chairman does not complete the term of such office as

14 established in the preceding sentence, the President shall

15 appoint, by and with the advice and consent of the Senate,

16 another member to complete the unexpired portion of such

17 term. The President shall also appoint, by and with the

18 advice and consent of the Senate, one member of the

19 Board to serve as Vice Chairman for a term of 4 years.

20 The Chairman and the Vice Chairman may each serve

21 after the end of their respective terms until a successor

22 has taken office.’’.

23 (b) PERFORMANCE OF DUTIES.—The second para24 graph of section 10 of the Federal Reserve Act (12 U.S.C.

25 242) (as amended by subsection (a)) is amended by insert26 ing after the seventh sentence the following: ‘‘In the event
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1 of the absence or unavailability of the Chairman, the Vice

2 Chairman or (in the Vice Chairman’s absence) another

3 member of the Board may be designated by the Chairman

4 to perform the duties of the office of the Chairman. If

5 a vacancy occurs in the office of the Chairman, the Vice

6 Chairman shall perform the duties of the Chairman until

7 a successor takes office. If a vacancy occurs in the office

8 of the Vice Chairman while the office of the Chairman

9 is vacant, the member of the Board with the most years

10 of service on the Board shall perform the duties of the

11 Chairman until a successor takes office.’’.

12 (c) EFFECTIVE DATE.—

13 (1) IN GENERAL.—Except as provided in para14 graph (2), the amendments made by this section

15 shall take effect on the date of enactment of this

16 Act.

17 (2) CURRENT CHAIRMAN TO COMPLETE

18 TERM.—Notwithstanding the amendment made by

19 subsection (a), any member who holds the office of

20 Chairman of the Board of Governors of the Federal

21 Reserve System on the date of enactment of this Act

22 shall continue in such office during the remainder of

23 the term to which such member was appointed.
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1 SEC. 4. DISCLOSURE OF INTERMEDIATE TARGETS.

2 Section 12A(b) of the Federal Reserve Act (12

3 U.S.C. 263(b)) is amended by adding at the end the fol4 lowing: ‘‘Notwithstanding any other provision of law, each

5 change, of any nature whatsoever, in the intermediate tar6 gets for monetary policy, which change is adopted by the

7 Committee, shall be disclosed to the public on the date

8 on which such change is adopted. For purposes of this

9 subsection, the term ‘intermediate targets’ means any pol10 icy objectives regarding monetary aggregates, credit ag11 gregates, prices, interest rates, or bank reserves.’’.

12 SEC. 5. AUDIT OF FINANCIAL TRANSACTIONS BY COMP13 TROLLER GENERAL.

14 Section 714(b) of title 31, United States Code (relat15 ing to audits by the Comptroller General), is amended—

16 (1) in paragraph (1), by inserting ‘‘or’’ at the

17 end;

18 (2) by striking paragraphs (2) and (3); and

19 (3) by amending paragraph (4) to read as fol20 lows:

21 ‘‘(2) memoranda, letters, or other written com22 munications between or among members of the

23 Board of Governors of the Federal Reserve System

24 or officers or employees of the Federal Reserve Sys25 tem relating to any transaction described in para26 graph (1).’’.
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1 SEC. 6. BOARD SUBJECT TO BUDGET PROCESS.

2 Section 1105 of title 31, United States Code (relating

3 to budget contents and submission to Congress), is amend4 ed by adding at the end the following new subsection:

5 ‘‘(g) FEDERAL RESERVE BOARD BUDGET TREAT6 MENT.—Not later than October 16 of each year, the esti7 mated receipts and proposed expenditures of the Board

8 of Governors of the Federal Reserve System and all Fed9 eral Reserve Banks for the current year and the next 2

10 succeeding years shall be transmitted by the Board to the

11 President. The President shall transmit to the Congress

12 the information received in accordance with this sub13 section, without change, together with the budget trans14 mitted to the Congress under subsection (a).’’.

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