McHenry at Hearing with Fed Chair Powell: Our Economy is On the Mend
February 24, 2021 -
Today, the House Financial Services Committee is holding a hearing with the Chairman of the Federal Reserve Board of Governors, Jerome Powell, to discuss the state of the economy, monetary policy, and the Federal Reserve’s response to the COVID-19 crisis.
Watch Republican leader Patrick McHenry’s opening remarks here.
Read Republican leader Patrick McHenry’s opening remarks as prepared for delivery:
“Chairman Powell, I would like to commend you again for your swift response to the pandemic. The Federal Reserve was the fastest acting part of the federal government, thanks to your foresight and leadership.
“As we’ve discussed previously, Chair Powell there is clear distinction between what is fiscal policy and within the purview of Congress; and what is monetary policy and within the purview of the Fed.
“I appreciate your work to protect the independence of the Fed and know that you will continue to do so.
“We have politicians who are talking down our economy, even the Speaker of the House saying, “the economic crisis is accelerating” – specifically to pass their spending package.
“Our economy is on the mend, despite what politicians parrot as their preferred narrative. The first phase of the storm is passing, now we have to deal with the damage COVID wrought.
“And the virus, the shutdowns, schools not reopening, the lack of childcare, have all had serious consequences.
“These are maladies which the Fed cannot fix.
“In fact, Congress doesn’t seem to have the power to do it either; it’s governors and the states they lead who are showing the path forward.
“Money alone will not fix it.
“Vaccines, testing, treatment and data-driven public health decisions will have a larger impact than either monetary policy or fiscal policy.
“What’s called for is targeted, temporary relief, directly related to COVID … not a typical, Keynesian stimulus bill, in the name of COVID relief.
“To be clear, we know there are many Americans still suffering. Behind every statistic is a family that is still reeling from this crisis. For a year now, we have been working to reach those in need.
“As you’ve said Chairman Powell, this is a tale of two recoveries.
“Employment for the top quartile of wage earners has fallen by four percent, while the bottom quartile has dropped a full 17 percent.
“Let’s dig deeper here.
“More than four million Americans have been unemployed for almost a year. In the restaurant industry alone, one out of six businesses have closed since last March.
“And while the CBO projects the unemployment rate, which currently stands at 6.2 percent—which is lower than the unemployment rate under President Obama during his first five and a half years in office—to continue to fall this year and to reach its pre-pandemic size by 2022, there are millions of American families juggling work, child care, and praying that their schools finally reopen.
“Yes, personal income actually increased at the end of last year, and the personal savings rate stands at over 13 percent, a level not seen in four decades. Yet childcare costs jumped by almost 50 percent last year.
“A year ago, women outnumbered men in the workforce. Since the pandemic, 2.5 million women have left the workforce.
“Given the nature of the shutdowns, this temporary aid, in addition to the Fed’s actions, prevented the worst possible outcome of this crisis. Now we must deal with the divide, the uneven recovery that has occurred.
“As we exit the pandemic, we need to find innovative solutions that support finding employment for these Americans and bringing those who exited the labor force completely – back in.
“The Fed must also be focused on regulatory flexibility and provide flexibility to financial markets.
“Chairman Powell, there are new challenges and choppy waters ahead. I’m grateful for your steady hand and pragmatic leadership.
“I yield back.”
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