WASHINGTON – Rep. Tom Reed, R-Corning, blamed President Obama on Monday for the Federal Reserve’s recent decision to try to stimulate the economy – even though the Fed is an independent agency that the president doesn’t control.
Speaking to reporters on his weekly conference call, Reed criticized “the latest move by the president, engaging in an extreme and desperate measure, with his latest round of stimulus, that came out of the Federal Reserve.”
Reed was referring to the Fed’s announcement last week that it would buy up $40 billion a month in mortgage-backed securities in an effort to drive down interest rates and boost the economy.
The Fed calls the move “quantitative easing,” but Reed called it “an extreme and desperate measure from the president” – even though, by law, the Fed and its decisions are independent from the president.
According to its website, the Federal Reserve “is considered an independent central bank because its monetary policy decisions do not have to be approved by the president or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms.”
Nevertheless, even when challenged by reporters, Reed doubled down on his effort to tie the Fed to President Obama.
“The Federal Reserve, being appointed by the president, is consistent with the president’s policies. And they’re getting desperate to the point where they’re tripling down on stimulus now,” he said.
The seven members of the Federal Reserve board serve 14-year terms, but thanks to vacancies, Obama has appointed all but one to their current slots. However, the chairman, Ben S. Bernanke, is a Republican whom Obama reappointed to a second four-year term at the helm in 2010.
And Bernanke has steadily discounted any claims of political influence in the Fed’s decisions.
“We have tried very, very hard, and I think we have been successful, at the Federal Reserve to be nonpartisan and apolitical,” he told reporters last week.
“We make our decisions based entirely on the state of the economy and the needs of the economy for a policy accommodation, so we just don’t take those factors into account, and we think that’s the best way to maintain our independence and maintain the trust of the public.”
In his initial, unprompted comments to reporters, Reed begged to differ, calling the Fed’s third round of quantitative easing “an extreme and desperate measure from the president.”
Reed’s comments drew a sharp rebuke from Nate Shinagawa, his Democratic opponent in the newly drawn 23rd District, which encompasses much of the Southern Tier.
Calling Reed’s comments “completely misleading,” Shinagawa said: “He’s playing a blame game. Congressman Reed and his tea party counterparts need to recognize that Congress is responsible for the economy and [has] so far failed turn things around.”