Source: United States Senator Kevin Cramer (R-ND)
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WASHINGTON – U.S. Senator Kevin Cramer (R-ND), during a Banking Committee hearing on the Federal Reserve’s Semiannual Report to Congress, discussed the consequences of conducting climate stress tests and discouraged Federal Reserve Chair Jerome Powell from wading into fiscal policy matters. Excerpts and full video are below.
Senator Cramer first responded to Chairman Sherrod Brown’s (D-OH) opening statement, which demonstrated the disconnect in Democrats’ outlook on regulatory authority, energy, and inflation.
“Raising interest rates won’t stop Senate Democrats and President Biden from overtaxing, overspending, overborrowing, overregulating. Chairman Brown said we should rebuild our supply chain by curbing offshoring, corporate offshoring – I agree. He talked a lot about corporate greed contributing to inflation – okay, but how about regulatory greed contributing to corporate greed? How do you expect corporations to reinvest money if you overregulate their ability to invest that money right here in the United States of America?
“You want to onshore some things. How about energy policy? How about, instead of looking to Venezuela or Iran for oil supply, or Russia, or rather than looking to China for electric vehicles and chips and solar panels, how about we have a strategy that onshores those things by reducing regulation, reducing taxes, letting those corporations reinvest their profits, rather than stock buybacks or dividends.
“This idea that, somehow, the Federal Reserve is supposed to keep inflation in check while half of the government works against it, is mind-boggling.”
In 2021, Chair Powell committed to returning to “regular order, which is the Fed doesn’t play a role in fiscal policy,” yet he continues to comment on such issues. Senator Cramer today spotlighted Chair Powell’s recent statements on raising the debt limit.
“[Chair Powell,] you were anxious to advise [Congress] to spend lots of money during the pandemic. I don’t think a lot of people blame you for that. […] Now, we’re in this debate between Republicans and Democrats – between, particularly, the House Speaker and the President – on how to raise the debt ceiling. You’ve made some pretty strong comments about raising the debt ceiling, absent from structural reforms that would actually help us get back to reasonable growth. I warn you again, if you’re going to make political comments – if you’re going to advise us on policy – be consistent with it.”
Finally, Senator Cramer addressed the emergent “greening” of the Federal Reserve and discussed the adverse effects of steering stakeholders toward the adoption of unreliable energy sources.
“If the Federal Reserve is now going to become part of the ‘federal climate police force,’ are we going to consider the ramifications of having entire communities and economies, factories and manufacturers, energy entities, large server farms… leaving them susceptible to a very unreliable, very expensive energy source? Is that part of the stress test?” asked Senator Cramer.
“Our only focus is on the safety and soundness of these institutions, and do they understand and can they manage all of the risks they run in their business model? That’s our only goal,” responded Chair Powell. “We’re not looking to be climate policymakers. Climate policy is clearly going to have effects on regions on companies, on individuals, on countries – disparate effects – and that is not for unelected people like us, who have a narrow mandate, but I think it does touch climate. You’re right to be concerned that we find ourselves on a slippery slope. […Banks] want to know how we’re thinking about this, but we will try really hard not to get on a slippery slope and find ourselves becoming climate policymakers. It’s just not appropriate for an independent agency.”