Scott Wants New Fed Governors to Cut Spending

The Federal Reserve has confirmed three new members to its Board of Governors: Lisa Cook, Ariana Kugler, and Philip Jefferson, appointed in January by President Biden. Senator Rick Scott (R-FL) has written letters to each of the new Board members congratulating them on the posts. More importantly, inquiring if they are willing to act transparently and accountably.

"I am very skeptical and concerned about the Federal Reserve’s actions over the past decade to balloon its balance sheet and asset holdings, namely the dangerous misallocation of capital that this has caused," wrote Sen. Scott, pointing at the nation's economic downturn.

Additionally, Sen. Scott pointed to the Fed's lack of an independent officer who acts as oversight and takes accountability compared to other agencies. Scott pointed to the failure of Signature Bank and the 2008 recession as proof of why the Fed should "stop policing itself" and have an Inspector General appointed by the President and confirmed by the Senate, much like the Supreme Court or other high-ranking offices.

To this end, Scott asked the three new appointees if they were willing to meet asset reduction goals and shrink the Fed's balance sheet, support the creation of an Inspector General position, scale back long-term "interventionist" purchases, and shuttering programs that "drain liquidity and dampen access to capital in U.S. markets."

In a nutshell, he asked if the new Governors would support spending cuts.

The new letter serves as the latest move by Scott toward reforming the Fed, much of which has been focused on its leadership. March saw him and Senator Elizabeth Warren (D-MD) introduce a bill to create the Inspector General position, while a later bill introduced in May tightened Board of Governors eligibility.

Finally, in August, Scott bluntly called for the resignation of the Fed's Chair Jerome Powell after he spoke at an economic policy symposium without mentioning rising costs or "reckless spending."

"Jay Powell’s speech had nothing about rising prices for food, groceries & gas – the things that most affect American families. He also didn’t talk about how reckless government spending continues to hurt our economy & fuel rising prices. It’s time for Jay Powell to resign," tweeted Scott.