This morning I am interested in hearing, Mr. Chairman, plans for reducing the size of the Fed's balance sheet, withdrawing extraordinary liquidity support from the banking system, and continuing the normalization of monetary policy.

Thank you. Chairman Bernanke, this Committee continues, as you well know, to wrestle with financial reform and the role of the Fed has been a significant part of that debate.

As our financial markets began to show signs of improvement, many of the Fed's temporary lending facilities have been allowed to expire, and monetary policy has begun to normalize.

Mr. Chairman, while there are signs of improvement in the economy, conditions remain weak, especially in labor markets.

His office insists the tactic is not about pork-barrel spending in his state. Instead, the issue is national security, specifically getting a new Air Force aerial refueling tanker and building a forensic facility to examine L.A. -- IEDs…

He says give me my pork, or I will bring the government to a halt.

If we basically all agree--and I hope we do--that nothing is too big to fail, and if we have sound regulation, the power, that regulators have the tools to regulate and do their job, safety and soundness trumps.

I remain willing to consider any proposal that will strengthen our regulatory framework and help our economy.

If they have the authority, then it is a question of do they have the will to use their authority. Is that right?

I think it is absolutely critical that that be clear in the legislation.

the spirit of the Volcker Rule, I think, is a good idea.

Do you believe that regulators presently have the ability to restrict a firm's activities, including their proprietary trading, if they deem this not to be a safe and sound practice?