Senate Democratic leaders responded with sharp criticism Wednesday to a letter sent by congressional Republican leaders to the Federal Reserve board urging the panel not to lower interest rates.
Asked by MSNBC’s Chuck Todd on Wednesday morning whether the move by the Republican leaders was an effort to influence the Fed policymakers, Senate Majority Whip Dick Durbin (D-Ill.) responded, “Why else would they send the letter?”
“They are trying to put political pressure on them not to lower interest rates,” he said. “When I go home to Illinois, the businesses I meet are struggling to borrow money, to expand their businesses and hire people. Lower interest rates will help them. Homeowners who are facing the restructuring of their mortgages would welcome lower interest rates.”
Durbin said that the move by congressional Republicans is “not one that’s going to play well across America.”
In their letter, Senate Minority Leader Mitch McConnell (R-Ky.), Minority Whip Jon Kyl (R-Ariz.), House Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) asked Federal Reserve Chairman Ben Bernanke and the other Federal Reserve board members to “resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data providing a case for economic action and quantifiable benefits to the American people.”
“We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy,” the leaders wrote. “Such steps may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers.”
Sen. Charles Schumer (D-N.Y.) also criticized the GOP leaders’ letter in a statement Tuesday night, calling it “a heavyhanded attempt to meddle in the Fed’s independent stewardship of monetary policy.“
“It should be ignored by Chairman Bernanke and the Fed’s policymakers,” Schumer said.
House Minority Whip Steny Hoyer (D-Md.) struck a less critical tone at a news conference at the Capitol Wednesday morning.
“Of course it’s an independent body, but it’s a free country,” Hoyer said, according to The Hill. “The Republicans and Democrats and others have the right to make suggestions to the Fed or to the president or to the Congress.”
Cantor defended the move, telling reporters after a closed-door meeting Wednesday morning that “many of us feel that some of the very loose monetary policy has had a negative effect as far as global confidence in our currency and ultimately in our economy.”
“We’re trying to maintain a sense of fiscal discipline in the policies and legislation that we’re pressing, and we want to see the Administration join us in a strong dollar policy, sensible regulatory policy and a pro-growth tax posture,” he said.
The results of the Fed’s latest meeting are expected to be made public at 2:15 p.m. Wednesday.