Source: United States House of Representatives – Congressman Juan Vargas (CA-51)
March 04, 2025
WASHINGTON – Today, U.S. Representative Juan Vargas (CA-52), Ranking Member of the House Financial Services Committee’s Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity, delivered opening remarks at the Task Force’s first hearing.
“Through this Task Force, I look forward to discussing important issues that affect our constituents and the entire economy, including the Federal Reserve’s monetary policy framework review, the supplemental leverage ratio, and the debate between rule-based and discretionary monetary policy. But I also plan to defend my core principles,” said Ranking Member Vargas. “Two of those core principles are my belief in the importance of the Fed’s dual mandate, and the need to protect the Fed’s independence.”
Watch Ranking Member Vargas’s opening remarks HERE. Read Ranking Member Vargas’s opening remarks as delivered:
Good morning, Mr. Chairman, and thank you very much for introducing me. And again, good morning to everybody else.
Let me congratulate you on being named as Chairman of this Task Force. As you know, I have a great deal of respect for you.
When I first came to Congress 13 years ago, I was on the Agriculture Committee, which you chaired, and I thought that you treated everyone evenhandedly, straightforward, and honestly. And I appreciate that. And I look forward to working with you together on issues where we find common ground.
Through this Task Force, I look forward to discussing important issues that affect our constituents and the entire economy, including the Federal Reserve’s monetary policy framework review, the supplemental leverage ratio, and the debate between rule-based and discretionary monetary policy.
But I also plan to defend my core principles, and I know you will.
Two of those core principles are my belief in the importance of the Fed’s dual mandate, and the need to protect the Fed’s independence.
The importance, first, of the dual mandate. As members of this Task Force we are well aware that the Fed’s dual mandate was established in 1977.
The amendments to the Federal Reserve Act passed that year tasked the Fed with two important goals – to create economic conditions that achieve both maximum employment and stable prices.
The inclusion of employment was no accident. The addition was thanks in large part to the work of Coretta Scott King and many in the labor movement.
Some have argued that the Fed Reserve’s dual mandate has been a distraction from solely focusing on price stability. But maximum employment should not be on the chopping block.
When Congress charged the Fed with this dual mandate, it recognized that having access to a job is a signal of a healthy economy.
Preventing the Fed from addressing employment would misunderstand the key way that many Americans experience the economy. And it would also disproportionately hurt working-class people.
Low employment harms Americans who are already living on the edge – working multiple jobs, and surviving paycheck to paycheck.
Chairman Powell has said that the dual mandate has “served us well” and that he “doesn’t see the case” to move forward with a single mandate of price stability. And I agree.
As Ranking Member, I intend to continue to advocate for the importance of preserving the Fed’s dual mandate.
Now with respect to the independence of the Fed – another area where the Fed has come under increased scrutiny – is its independence.
The research is clear that central banks around the world function at their best when they’re allowed to operate independently.
Elected officials mostly operate on a short-term horizon, responding to short-term political incentives.
But the Fed must make decisions considering a much longer time horizon. That is why it is critical that monetary policy be insulated from external political pressure.
The President’s recent executive order requiring independent agencies to submit proposed regulatory actions, strategic plans, and priorities to the White House for review only makes this issue more important.
And it’s also worrisome that now Treasury Secretary Scott Bessent has floated the idea of creating a shadow Fed chair before Chairman Powell’s term expires in May of 2026.
We in Congress, regardless of political party, must continue to strongly defend the independence of the Fed.
The new Administration has brought in a wave of uncertainty.
Whether it’s tariffs or the future independence of the Fed, our constituents are increasingly unsure of their economic future.
We see it in recent national consumer sentiment numbers, which have shown that consumer confidence fell by seven points in the most recent Conference Board’s Consumer Confidence Survey.
And I’m hearing from businesses in my district in San Diego who are increasingly concerned about the impact that tariffs and trade wars will have on the economy
I hope that this Task Force will provide a forum for substantive debate and collaboration on these issues that impact our constituents. I’m looking forward to it.
And with that I yield back.
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