Congressional Record: Proceedings and Debates of the 106th Congress, First Session, Volume 145, Part 14 Page: 19,418

                                
CONGRESSIONAL RECORD-SENATE

August 4, 1999

local taxes. As I have said, that is not
the case now. The current tax code is
biased in favor of states that raise rev-
enue through an income tax. I strongly
support comprehensive reform of the
tax code that will address issues such
as neutrality, fairness and simplicity.
As we work to reform the overall tax
code, restoring equality in this area
should be a part of the discussion.
By Mr. MACK (for himself, Mr.
ABRAHAM,    Mr.   ALLARD,    Mr.
BENNETT, Mr. BROWNBACK, Mr.
HAGEL, Mr. HELMS, and        Mr.
SHELBY):
S. 1492. A bill to require the Board of
Governors of the Federal Reserve Sys-
tem to focus on price stability in estab-
lishing monetary policy to ensure the
stable, long-term purchasing power of
the currency, to repeal the Full Em-
ployment and Balanced Growth Act of
1978, and for other purposes; to the
Committee on Banking, Housing, and
Urban Affairs.
ECONOMIC GROWTH AND PRICE STABILITY ACT OF
1999
" Mr. MACK. Mr. President, I ask that
the text of the bill be printed in the
RECORD.
The bill follows:
S. 1492
Be it enacted by the Senate and House of Rep-
resentatives of the United States of America in
Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the "Economic
Growth and Price Stability Act of 1999".
SEC. 2. FINDINGS; STATEMENT OF POLICY.
(a) FINDINGS.-The Congress finds that-
(1) during periods of inflation, the United
States has experienced a deterioration in its
potential economic growth;
(2) a decline in inflation has been a crucial
factor in encouraging recent robust eco-
nomic growth;
(3) stable prices facilitate higher sustain-
able levels of economic growth, investment,
and job creation;
(4) the multiple policy goals of the Full
Employment and Balanced Growth Act of
1978 cause confusion and ambiguity about
the appropriate role and aims of monetary
policy, which can add to volatility in eco-
nomic activity and financial markets, harm-
ing economic growth and costing workers
jobs;
(5) recognizing the dangers of inflation and
the appropriate role of monetary policy, po-
litical leaders in countries throughout the
world have directed the central banks of
those countries to institute reforms that
focus monetary policy on the single objec-
tive of price stability, rather than on mul-
tiple policy goals;
(6) there is a need for the Congress to clar-
ify the proper role of the Board of Governors
of the Federal Reserve System in economic
policymaking, in order to achieve the best
environment for long-term economic growth
and job creation; and
(7) because price stability is a key condi-
tion for maintaining the highest possible
levels of productivity, real incomes, living
standards, employment, and global competi-
tiveness, price stability should be the pri-
mary long-term goal of the Board of Gov-
ernors of the Federal Reserve System.
(b) STATEMENT OF POLICY.-It is the policy
of the United States that-

(1) the principal economic responsibilities
of the Government are to establish and en-
sure an environment that is conducive to
both long-term  economic growth and in-
creases in living standards, by establishing
and maintaining free markets, low taxes, re-
spect for private property, and the stable,
long-term purchasing power of the United
States currency; and
(2) the primary long-term goal of the Board
of Governors of the Federal Reserve System
(hereafter in this Act referred to as the
"Board") should be to promote price sta-
bility.
SEC. 3. MONETARY POLICY.
(a) AMENDMENT TO THE FEDERAL RESERVE
ACT.-Section 2A of the Federal Reserve Act
(12 U.S.C. 225a) is amended to read as follows:
"SEC. 2A. MONETARY POLICY.
"(a) PRICE STABILITY.-The Board and the
Federal Open Market Committee (hereafter
in this section referred to as the 'Com-
mittee') shall-
"(1) establish an explicit numerical defini-
tion of the term 'price stability'; and
"(2) maintain a monetary policy that effec-
tively promotes long-term price stability.
"(b) CONGRESSIONAL   CONSULTATION.-Not
later than February 20 and July 20 of each
year, the Board shall consult with the Con-
gress at semiannual hearings before the
Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on
Banking and Financial Services of the House
of Representatives, about the objectives and
plans of the Board and the Committee with
respect to achieving and maintaining price
stability.
"(c)   CONGRESSIONAL    OVERSIGHT.-The
Board shall, concurrent with each semi-
annual hearing required by subsection (b),
submit a written report to the Congress con-
taining-
"(1) numerical measures to help assess the
extent to which the Board and the Com-
mittee are achieving and maintaining price
stability in accordance with subsection (a);
"(2) a description of the intermediate vari-
ables used by the Board to gauge the pros-
pects for achieving the objective of price sta-
bility; and
"(3) the definition, or any modifications
thereto, of 'price stability' established in ac-
cordance with subsection (a)(1).".
(b) COMPLIANCE ESTIMATE.-
(1) IN GENERAL.-Concurrent with the first
semiannual hearing required by section 2A(b)
of the Federal Reserve Act (as amended by
subsection (a) of this section) following the
date of enactment of this Act, the Board
shall submit to the Congress a written esti-
mate of the length of time it will take for
the Board and the Committee to fully
achieve price stability. The Board and the
Committee shall take into account any po-
tential short-term effects on employment
and output in complying with the goal of
price stability.
(2) DEFINITIONS.-For purposes of this sec-
tion-
(A) the term "Board" means the Board of
Governors of the Federal Reserve System;
and
(B) the term "Committee" means the Fed-
eral Open Market Committee.
SEC. 4. REPEAL OF OBSOLETE PROVISIONS.
(a) FULL   EMPLOYMENT   AND   BALANCED
GROWTH ACT OF 1978.-The Full Employment
and Balanced Growth Act of 1978 (15 U.S.C.
3101 et seq.) is repealed.
(b) EMPLOYMENT ACT OF 1946.-The Em-
ployment Act of 1946 (15 U.S.C. 1021 et seq.)
is amended-
(1) in section 3 (15 U.S.C. 1022)-

(A) in the section heading, by striking
"and short-term economic goals and poli-
cies";
(B) by striking "(a)"; and
(C) by striking "in accord with section
11(c) of this Act"  and all that follows
through the end of the section and inserting
"in accordance with section 5(c).";
(2) in section 9(b) (15 U.S.C. 1022f(b)), by
striking ", the Full Employment and Bal-
anced Growth Act of 1978,";
(3) in section 10 (15 U.S.C. 1023)-
(A) in subsection (a), by striking "in the
light of the policy declared in section 2";
(B) in subsection (e)(1), by striking "sec-
tion 9" and inserting "section 3"; and
(C) in the matter immediately following
paragraph (2) of subsection (e), by striking
"and the Full Employment and Balanced
Growth Act of 1978";
(4) by striking section 2;
(5) by striking sections 4 through 8; and
(6) by redesignating sections 3, 9, 10, and 11
as sections 2 through 5, respectively.
(c) CONGRESSIONAL BUDGET ACT OF 1974.-
Title III of the Congressional Budget Act of
1974 (2 U.S.C. 631 et seq.) is amended-
(1) in section 301-
(A) in subsection (b), by striking paragraph
(1) and redesignating paragraphs (2) through
(9) as paragraphs (1) through (8), respec-
tively;
(B) in subsection (d), in the second sen-
tence, by striking "the fiscal policy" and all
that follows through the end of the sentence
and inserting "fiscal policy.";
(C) in subsection (e)(1), in the second sen-
tence, by striking "as to short-term and me-
dium-term goals"; and
(D) by striking subsection (f) and inserting
the following:
"(f) [Reserved.]"; and
(2) in section 305-
(A) in subsection (a)(3), by inserting before
the period at the end ", as described in sec-
tion 2 of the Economic Growth and Price
Stability Act of 1999";
(B) in subsection (a)(4)-
(i) by striking "House sets forth the eco-
nomic goals" and all that follows through
"designed to achieve," and inserting "House
of Representatives sets forth the economic
goals and policies, as described in section 2
of the Economic Growth and Price Stability
Act of 1999,"; and
(ii) by striking "such goals," and all that
follows through the end of the paragraph and
inserting "such goals and policies.";
(C) in subsection (b)(3), by inserting before
the period at the end ", as described in sec-
tion 2 of the Economic Growth and Price
Stability Act of 1999"; and
(D) in subsection (b)(4)-
(i) by striking "goals (as" and all that fol-
lows through "designed to achieve," and in-
serting "goals and policies, as described in
section 2 of the Economic Growth and Price
Stability Act of 1999,"; and
(ii) by striking "such goals," and all that
follows through the end of the paragraph and
inserting "such goals and policies.".
By   Mr. SPECTER      (for himself
and Mr. SANTORUM):
S. 1493. A bill to establish a John
Heinz Senate Fellowship Program to
advance the development of public pol-
icy with respect to issues affecting sen-
ior citizens; to the Committee on Rules
and Administration.
THE JOHN HEINZ SENATE FELLOWSHIP PROGRAM
Mr. SPECTER. Mr. President, I have
sought recognition to introduce a bill

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