S.869 - Federal Reserve Board Abolition Act (119th Congress)
Summary
S.869, the "Federal Reserve Board Abolition Act," proposes to abolish the Board of Governors of the Federal Reserve System and the Federal Reserve Banks, and to repeal the Federal Reserve Act. The bill mandates a one-year period for winding down the affairs of the Board and the banks. It also outlines procedures for liquidating assets and assuming liabilities by the Secretary of the Treasury and the Director of the Office of Management and Budget (OMB).
Expected Effects
If enacted, the bill would eliminate the current structure of the Federal Reserve System. The Secretary of the Treasury and the OMB Director would manage the liquidation of assets and assumption of liabilities. The functions currently performed by the Federal Reserve would need to be addressed through alternative mechanisms.
Potential Benefits
- Could potentially eliminate perceived undue influence of the Federal Reserve on monetary policy.
- May lead to greater transparency and accountability in monetary policy decisions if the Treasury assumes control.
- Could free the government from obligations to private member banks within the Federal Reserve System.
- Might allow for a restructuring of the financial system to better serve the needs of the public.
- Could result in a one-time influx of funds to the Treasury from the liquidation of Federal Reserve assets.
Potential Disadvantages
- Could destabilize the financial system by removing a key regulatory and monetary policy institution.
- May lead to political interference in monetary policy decisions if the Treasury assumes control.
- Could disrupt the flow of credit and increase uncertainty in financial markets.
- Might negatively impact the international standing of the U.S. dollar.
- Could create significant economic disruption during the transition period.
Constitutional Alignment
The constitutionality of abolishing the Federal Reserve is complex. Congress has the power to coin money and regulate the value thereof (Article I, Section 8). The Federal Reserve Act was established under this constitutional authority. Repealing the act and abolishing the Federal Reserve would be an exercise of congressional power, but the implications for monetary policy and economic stability would need careful consideration. The transfer of assets and liabilities to the Treasury would also need to be consistent with constitutional provisions regarding government finance.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).