As the 115th session of Congress converges and Trump prepares for his inauguration, two landmark proposals introduced in the Senate have the capacity to alter the way the Beltway operates. What makes these pieces of legislation, term limits and auditing the Federal Reserve, unique at this moment is that with a Trump Presidency, they have a chance of coming to fruition. In addition, these proposals go beyond the standard left-right political spectrum arguments into a realm where the discussion centers around how can we make those in power more accountable towards the people.
Senators Ted Cruz (R., TX) and John DeSantis (R., FL) proposed a constitutional amendment for term limits in Congress. Under the amendment, Senators would be limited to two terms for a maximum of 12 years and Representatives would be limited to three terms for a maximum of 6 years. In a statement about the proposal, Ted Cruz said:
“The American people resoundingly agreed on Election Day, and President-elect Donald Trump has committed to putting government back to work for the American people… It is well past time to put an end to the cronyism and deceit that has transformed Washington into a graveyard of good intentions.”
The way Congress is set up as an institution is to reward those who are best at getting re-elected. This fact is shown with incumbents winning at a rate of 90%. When the Founding Fathers created Congress, they intended for people to serve for a few terms then relinquish power. Being a member of Congress was meant to be a public service, not a private career. What term limits would do is fundamentally restructure where Congressmen put their priorities. Instead of constantly worrying about raising money for their re-election campaigns, they can focus more on making decisions that are best for their constituents and the American people.
In addition, Machiavelli states in Book III of The Discourses that when governments grow old they are bound to become corrupted, similar to how the human body is more prone to illness with age. In order for them to be rejuvenated, governments would need to restore themselves to their founding principles. What term limits would do would be to mitigate the cancerous growth that governments are bound to have by refreshing congressional seats with new members and ideas. There is a better chance for the founding principles to be restored when new reformers are elected to Congress instead of having career politicians who are comfortable with the system win non-competitive races every few years.
We already have term limits for our President. Wouldn’t make sense to apply that principle to the branch of government that makes the laws.
Auditing the Fed
Senator Rand Paul (R., KY) and Representative Thomas Massie (R., KY) introduced coinciding legislation in their legislative chambers to audit the Fed. The bill would allow the Government Accountability Office to further scrutinize how Fed officials decide and influence short-term interest rates. Although many aspects of The Fed are already audited, for some reason this particular area of monetary policy has been exempted from the similar inquiry. Even Trump has made his grievances with The Federal Reserve known, even tweeting that it is time to audit the Fed. Yet, critics of the plan such as Federal Reserve Chairman Janet Yellen say that auditing the Fed would politicize their decisions and ruin their independence.
As a response to her claims, her former advisor and current Dartmouth Economics Professor Andrew Levin stated that after over 100 years of unchanged policies, that the Federal Reserve greatly needs to be reformed. In his open letter, he states:
However, the Fed’s governance structure was established more than a century ago and no longer ensures that the Fed serves the public interest. Unlike any other government agency, private banks have a direct role in governing the Fed. This governance structure elevates the priorities of financial institutions and large corporations over the needs of America’s working families.Furthermore, its transparency and accountability are severely deficient, which impairs appropriate Congressional oversight and undermines the public’s trust in the Fed.
Levin offers four ways to reform the Fed to be more transparent to the American people while still maintaining enough independence to perform effective monetary policy. They include making The Fed a fully public institution, a more transparent regional presidency selection process, term limits for Fed Officials, and full oversight and accountability just like any other key public institution.
Auditing the Fed is nothing new and has been proposed by Former Representative Ron Paul in previous sessions of Congress. Also, in 2011, Paul introduced an alternative to the Federal Reserve System that promotes competition among currencies called the Free Competition in Currency Act which would allow other mediums of exchanged to be considered legal tender. This legislation is extremely significant because it paves the way for further legitimizing cryptocurrencies such as Bitcoin, Ether, etc.
No doubt that these proposals will face uphill battles among politicians who defend the status-quo, yet a perfect storm for these proposals to pass. Both term limits and auditing the Fed are extremely popular among the American people. Furthermore, Trump supports both of these pieces of legislation, and he has an incentive to make them become law because that was the bottom line of his campaign, to drain the swamp. No matter if you consider yourself a liberal or conservative, we can all agree that limiting power and increasing transparency would be a positive thing for the American people.
It is vital though for people not to stop paying attention to politics just because the election is over. For these amendments to pass, everyone needs to take less than a minute to call your Senator. As someone who has worked in the halls of Capitol Hill before, I can assure you that if enough people contact them, they will listen.