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114th Congress   }                                    {         Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                    {        114-331

======================================================================



 
               CENTENNIAL MONETARY COMMISSION ACT OF 2015

                                _______
                                

 November 16, 2015.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 2912]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 2912) to establish a commission to examine the 
United States monetary policy, evaluate alternative monetary 
regimes, and recommend a course for monetary policy going 
forward, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                          PURPOSE AND SUMMARY

    Introduced by Representative Brady of Texas, H.R. 2912, the 
``Centennial Monetary Commission Act of 2015,'' establishes the 
Centennial Monetary Commission to study monetary policy 
including, among other topics, (1) the historical monetary 
policy of the Federal Reserve; (2) the various operational 
regimes under which the Federal Reserve may conduct monetary 
policy; (3) the use of macro-prudential supervision and 
regulation as a tool of monetary policy; and (4) the Lender-of-
Last-Resort function. The Commission is also charged with 
recommending a course of United States monetary policy going 
forward and must report to Congress with its findings, 
conclusions, and recommendations by December 1, 2016.
    The Commission is empowered to hold hearings, take 
testimony, receive evidence, and administer oaths. The 
Commission is also authorized to obtain official data from 
Executive Branch agencies.

                  BACKGROUND AND NEED FOR LEGISLATION

    Throughout the history of the United States, commissions 
have helped government officials develop and implement federal 
policy reforms. For example, the National Monetary Commission 
contributed to the establishment of the Federal Reserve System 
in 1913. Similarly, the 9/11 Commission led to important 
reforms of the nation's intelligence system.
    H.R. 2912 establishes the Centennial Monetary Commission 
(CMC) and charges it with studying the conduct of monetary 
policy, including:
           The historical monetary policy of the 
        Federal Reserve in terms of output, employment, prices, 
        and financial stability over time;
           The various operational regimes under which 
        the Fed may conduct monetary policy in terms of 
        achieving its current dual mandate, including
                    Discretion in determining monetary policy 
                without an operating regime;
                    Price level targeting;
                    Inflation rate targeting;
                    Nominal-GDP targeting;
                    Use of monetary policy rules; and
                    The gold standard.
           The use of macro-prudential supervision and 
        regulation as a tool of monetary policy in terms of 
        achieving maximum output, employment and price 
        stability over the long-term; and
           The use of the Lender-of-Last-Resort 
        function by the Fed Board of Governors as a tool of 
        monetary policy in terms of achieving maximum output, 
        employment, and price stability over time.
    The membership of the CMC is comprised of 12 voting 
members, six of whom are appointed by the Speaker of the House 
of Representatives (of which four are majority party members 
and two are minority party members); the remaining six voting 
members are appointed by the President Pro Tempore of the 
Senate (of which four are majority party members and two are 
minority party members). The CMC's membership also includes one 
non-voting member appointed by the Secretary of the Treasury 
and one non-voting member appointed by the Federal Reserve 
Chair from among the presidents of the Federal Reserve Banks. 
One of the CMC's members is jointly designated as the chair by 
the Speaker and the Senate majority leader.
    H.R. 2912 requires the CMC, by December 1, 2016, to submit 
to Congress and make publicly available a report on monetary 
policy. The report must include findings and conclusions 
concerning the areas of study outlined above, as well as 
recommendations for United States monetary policy going forward 
with respect to, among other matters, transparency and the 
Fed's legislative mandate.
    The CMC is empowered to hold hearings, take testimony, 
receive evidence, and administer oaths. The CMC is additionally 
permitted to enter into contracts and obtain official data from 
federal agencies. It may utilize administrative support 
services from the General Services Administration, retain 
detailees and consultants, and hire and set compensation for 
staff subject to certain limits.
    The CMC terminates on June 1, 2017.

                                HEARINGS

    The Committee on Financial Services' Subcommittee on 
Monetary Policy and Trade held a hearing examining matters 
relating to H.R. 2912 on July 22, 2015.

                        COMMITTEE CONSIDERATION

    The Committee on Financial Services met in open session on 
July 28, 2015 and July 29, 2015, and ordered H.R. 2912 to be 
reported favorably to the House without amendment by a recorded 
vote of 35 yeas to 22 nays (recorded vote no. FC-54), a quorum 
being present.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole record vote in committee was a motion by Chairman 
Hensarling to report the bill favorably to the House without 
amendment. The motion was agreed to by a recorded vote of 35 
yeas to 22 nays (Record vote no. FC-54), a quorum being 
present.




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 2912 
will facilitate the formulation and execution of effective 
monetary policy by forming a commission to study Federal 
Reserve operations and issue a report recommending improvements 
to the Feds monetary policy function.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                 CONGRESSIONAL BUDGET OFFICE ESTIMATES

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 19, 2015.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2912, the 
Centennial Monetary Commission Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 2912--Centennial Monetary Commission Act of 2015

    H.R. 2912 would establish the Centennial Monetary 
Commission to, among other things, examine how United States 
monetary policy has affected economic performance, evaluate 
various structures for conducting monetary policy, and 
recommend a direction for future actions. The commission would 
be required to prepare a report for the Congress and the public 
containing its findings and recommendations by December 1, 
2016. The commissions authority would lapse on June 1, 2017.
    Based on the cost of similar commissions, CBO estimates 
that implementing H.R. 2912 would cost about $1 million over 
the 2016-2020 period, assuming appropriation of the necessary 
amounts to cover the cost of professional and administrative 
staff, travel, consultants, and general overhead. Enacting H.R. 
2912 would not affect direct spending or revenues; therefore, 
pay-as-you-go procedures do not apply.
    H.R. 2912 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Susan Willie. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates reform 
Act.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         EARMARK IDENTIFICATION

    H.R. 2912 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee states that no provision of H.R. 2912 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   DISCLOSURE OF DIRECTED RULEMAKING

    Pursuant to section 3(k) of H. Res. 5, 114th Cong. (2015), 
the Committee states that H.R. 2912 contains no directed 
rulemakings.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    This Section cites H.R. 2912 as the ``Centennial Monetary 
Commission Act of 2015.''

Section 2. Findings

    This section contains findings relating to the reasons for 
establishing the Centennial Monetary Commission.

Section 3. Establishment

    This section establishes the Centennial Monetary 
Commission.

Section 4. Duties

    This section requires the Centennial Monetary Commission to 
study matters relating to monetary policy and report thereon 
not later than December 1, 2016.

Section 5. Membership

    This section provides that the membership of the Centennial 
Monetary Commission shall consist of 12 voting members 
appointed by specified members of the Legislative Branch, one 
non-voting member appointed by the Treasury Secretary, and one 
non-voting member who is a Federal reserve bank president 
appointed by the Chair of the Federal Reserve Board of 
Governors. This section further provides that the Chairman of 
the Commission shall be jointly designated by the Speaker of 
the House and the majority leader of the Senate. Finally, this 
section establishes procedures for the occurrence of membership 
vacancies and the conduct of Commission meetings.

Section 6. Powers

    This section permits the Centennial Monetary Commission to 
hold hearings, to enter into contracts, to obtain data, to 
secure the assistance of federal agencies, and to use the 
postal service in the same manner and under the same conditions 
as other departments and agencies.

Section 7. Commission personnel

    This section permits the Chair of the Centennial Monetary 
Commission to appoint and fix the pay of the Commissions 
executive director and other personnel as the Chair considers 
appropriate. This section further provides that Commission 
staff may be appointed without regard to title 5, U.S. Code, 
relating to appointments in the competitive service, and that 
such staff may be compensated without regard to classification 
and General Schedule pay rates under chapter 51 and subchapter 
III of chapter 53 of title 5, U.S. Code. Finally, this section 
establishes a ceiling applicable to Commission staff salaries 
and permits the Commission to utilize consultants and federal 
agency detailees subject to certain conditions.

Section 8. Termination

    This section provides that the Centennial Monetary 
Commission shall terminate on June 1, 2017.

Section 9. Authorization of appropriations

    This section authorizes the appropriation of such sums as 
may be necessary to carry out the Act.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    H.R. 2912 does not amend any section of a statute. 
Therefore, the Office of Legislative Counsel did not prepare 
the report contemplated by clause 3(e)(1)(B) of rule XIII of 
the House of Representatives.

                             MINORITY VIEWS

    H.R. 2912, is a solution in search of a problem. In 
response to the 2008 financial crisis and the worst recession 
since the Great Depression, the Federal Reserve took a number 
of extraordinary actions consistent with its dual mandate to 
promote price stability and full employment and its role as the 
lender of last resort. As a result of its actions, the U.S. 
economy has made remarkable progress, leading to the creation 
of more than 13 million private sector jobs over 68 consecutive 
months and solid growth in nominal household wealth.
    Yet despite these gains, Republicans complain that the 
Federal Reserve's monetary policy was too accommodative, too 
risky, unpredictable and prone to inflation. In response to 
these concerns, which are without merit, they have called for 
``reforms'' to virtually every aspect of the Federal Reserve 
from its overarching objective to keep inflation in check and 
promote full employment, to reviewing the particulars of the 
securities and operational regime used in achieving its 
statutory objectives.
    The fact is the Federal Reserve's current dual mandate and 
operational monetary policy independence have served the 
economy well. Such independence ensures that policy decisions 
are empirically driven rather than motivated by short-term 
political pressures, while its clear objectives allow Congress 
to hold it accountable. The creation of a partisan panel where 
8 of the 12 voting members are Republicans will unlikely result 
in objective improvements to our current monetary policy 
system.
    Rather, it would legitimize calls to eliminate the Federal 
Reserve's focus on employment and interfere with the Federal 
Reserve's independence in using the policy instruments it 
determines are necessary to strengthen the economy.
    For these reasons, the Minority opposes H.R. 2912.

                                   Maxine Waters.
                                   Gwen Moore.
                                   Carolyn B. Maloney.

                                  [all]