Scott Urges Fed Chair to Work for the American People and Avoid Politics

WASHINGTON – In his opening statement at today’s U.S. Senate Committee on Banking, Housing, and Urban Affairs hearing with Federal Reserve Chair Jerome Powell, Ranking Member Tim Scott (R-S.C.) emphasized that Americans are still paying the price of high inflation caused by excessive progressive spending. The Senator also expressed the need to keep controversial climate and social policy debates separate from the application of sound economic principles. The Ranking Member concluded by highlighting a letter he and fellow Banking Committee Republicans sent to Chair Powell on Friday urging him to ensure the Federal Reserve’s review of capital standards is risk-based, tailored, and not harmful to the American economy.

                                                                                                       Watch the opening remarks here. 

Ranking Member Scott’s opening remarks as delivered:

“Sitting here, looking at my prepared remarks… there is an opening coming where Vice Chair Brainard is moving on, I think it’s really important for us to make sure that all the information that we need in order to make a good decision on the next [nomination] that we have in a timely fashion. So, I would really implore the Chair to make sure that happens. That every question, every questionnaire that is asked from the person, we get. Every member of this committee has their questions answered in a timely fashion, and that the staff has their answers in a timely fashion. 

Listening to Chairman Brown, I thought to myself: “Fascinating, truly fascinating.” I concluded that while I know Chairman Brown pretty well, I am sure he is sincere… 

But let me just say this, spending and printing trillions of dollars, caving to the radical Left in this country, seeing policies posited and then implemented that led to the worst inflation in 40 years, seeing our inflation at 9.1%, seeing American families struggle because of the weight of the government on their shoulders, seeing the devastation from South Carolina to Ohio—it’s unbelievable that the progressives in this country who caused 9.1% inflation would then turn somewhere besides the mirror to see the absolute devastation caused by their out-of-control spending is remarkable. Remarkable. 

To stop the out-of-control inflation caused by the out-of-control spending, the Fed steps in to cool the economy. Well, the definition of cooling the economy is necessary because we’ve seen the most radical approach, to a problem that was in our rearview mirror, being used to bring in a level of socialism and spending that our nation has not seen in my lifetime. 

The facts are very simple: when you get to 9.1% inflation in this nation, as a kid who grew up in a single-parent household mired in poverty, a 40% – today, a 100% just a year ago – increase in the gas prices devastates single mothers around this country. For seniors on fixed income whose savings are being depleted, with an average cost just last month of a $433 increase because of inflation. For my friends on the other side of the aisle to look any place besides a mirror, I find stunning. 

The truth is that when your food prices go up over 20%, when your electricity is up over 20%, you have to ask yourself: “Where in the world are they?” They cannot be in this universe, it must be an alternate universe where in fact it is okay for us to prices go through the roof and our economy not stumble, but fall into a ditch. Why are we in the ditch? Because progressives used the pandemic as a way to usher in a form of spending that takes the money out of the pockets of everyday Americans and puts it in the coffers of the government. 

There is a better way. The better way is to trust the American people. And when you do so, you don’t have to have the Fed come in and raise interest rates so high to quell the challenges in our economy so that today versus 18 months ago, the price of the same house for your mortgage payment is twice as high. Why? Because of the runaway spending of our friends on the other side of the aisle. 

I’m sure I do not have time for my opening comments, what I will say without any question, as I look around the country, and I ask myself how devastating is it that today it costs $433 more dollars than it did a year ago, the answer is it is a crisis when the average family in our country didn’t have $400 in their savings for an emergency, to have prices go up by this amount is devastating. To have a conversation about rents around the country, looking at the inflationary effect and the absolute devastation of a snarling supply chain, we haven’t seen in my lifetime, run by my friends and the progressives, unbelievable. 

Now to get to you, Chairman Powell. One of the comments you made that I think is really important in one of the speeches you gave in January… “It is essential,” you said, “that we stick to our statutory goals and authorities, and that we resist the temptation to broaden our scope to address other important social issues of the day. Taking on new goals, however worthy, without a clear statutory mandate would undermine the case for our independence.”  

You further noted that, and I quote, “Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals. We are not, and will not be, a climate policymaker.”  

Do you still stand by those comments? 

CHAIRMAN POWELL: “I do.” 

… Finally, several of my Republican colleagues and I sent a letter to you discussing Vice Chair of Supervision Michael Barr’s plan to conduct a “holistic” review of capital standards. I look forward to discussing those capital standards during my Q and A, and I will thank you for our recent conversation that we had that helped illuminate some of the necessary challenges that we face as a nation and your answers to it. Thank you.