Harry Reid: “I rise today with the Senator from North Dakota to introduce legislation which we believe will improve fiscal management…”

“I rise today with the Senator from North Dakota to introduce legislation which we believe will improve fiscal management within the Federal Reserve System and will allow private-sector competitors to compete fairly in "priced services." We assure you that nothing in this bill affects monetary policy of the Federal Reserve. Back in September 1993, Senator Dorgan and I requested a GAO investigation of the operations and management of the Federal Reserve System. We were concerned because no close examination of the Fed's operations had ever been conducted before. The GAO report that was issued in 1996 raised serious questions about management within the Fed which this bill will address. One of the most astonishing findings in the 1996 report was the Fed had squirreled-away $3.7 billion in taxpayer money in a slush fund. As of January 1998, this amount has now grown to $5.2 billion. This money could be used for deficit reduction. The Fed claims the slush fund is needed to cover system losses. Since it was created in 1913, however, the Fed has never operated at a loss. This bill prohibits maintenance of surplus accounts and the surplus funds must be sent to Treasury.”