Is the Fed’s Legislative Outreach Really Weak?

Created: May 05, 2010 11:04 | Last updated: July 31, 2020 00:00

With Sen. Bernie Sanders (I-Vt.) attempting to round up votes for an Audit the Fed amendment to Sen. Chris Dodd’s (D-Conn.) financial regulatory reform proposal, Jon Hilsenrath of The Wall Street Journal takes note of the problems at the Fed’s congressional liaison office.

The Federal Reserve’s efforts to fend off challenges to its independence by Congress could be complicated by departures from the central bank’s legislative-affairs office.

Three officials in the office — Laricke Blanchard, Robert Pribble and Tara Foscato — are on their way out or on leave from the group, cutting it nearly in half for now. Mr. Pribble is going to work for a hedge fund, Ms. Foscato a lobbyist. Mr. Blanchard, who used to run the group, has been loaned to the Export-Import Bank for six months.

The Fed’s liaison office, which handles its relations with Congress, has gone through significant turnover in the past year as the Fed has tried to position itself to manage the biggest congressional challenge to its authorities since the Great Depression.

The piece is suggestive, saying that staffing problems “might complicate” the Fed’s efforts to retain its independence. But it is not long or detailed. And it is particularly short on quotes. The sole person cited in the article, in fact, is a small-banks lobbyist — Camden Fine, of the Independent Community Bankers of America, who notes, “Having a weakened advocacy shop, legislative affairs shop, certainly does not help the Fed state its case or advance those issues that are important to it.”

But getting Hill staffers to knock the Fed is not very hard, so I contacted a few offices to see if they felt the revolving door at the Fed’s leg shop had in fact hurt or “complicated” the central bank’s outreach and to describe the Fed’s congressional relations in general.

As is always the case in Washington, to a certain extent, the answer depended on the prominence of the Senate or House staffer and the relevance of the office to the debate. But Hill staffers described the Fed’s outreach as “excellent,” “effective” and “really good” — noting that Fed staffers up to and including Chairman Ben Bernanke have personally worked with members of Congress throughout the financial regulatory reform process. Even offices highly critical of the Fed said they had no trouble getting questions answered or phone calls returned. And Hill staffers noted that the Fed has strong proxy outreach through the White House and Treasury — there is not much sunlight between the three when it comes to central bank policy and central bank independence.