Federal Reserve Chairman Alan Greenspan will have to have to make at least one more round of appearances on Capitol Hill thanks to a last-minute action by Congress.
As part of a broad spending bill passed Friday by the Senate and that President Clinton is expected to sign, the Fed chairman will once more have to report to Congress on the state of U.S. economy and Fed interest-rate policy. The requirement was to expire at the end of this year and efforts to preserve it had been met with opposition from Sen. Phil Gramm (R-Tex.), chairman of the Senate Banking Committee.
"What this does is ensure that there will be Humphrey-Hawkins testimony in the House and Senate in February," said David Runkel, a spokesman for House Banking Committee Chairman Jim Leach (R-Iowa), who wants the requirement restored permanently.
Reports to Congress from the Fed chairman have been required as part of the Full Employment and Balanced Growth Act of 1978, popularly known as the Humphrey-Hawkins law after its chief sponsors, Sen. Hubert H. Humphrey (D-Minn.) and Rep. Augustus F. Hawkins (D-Calif.).
Greenspan's closely watched testimony to the House committee wasn't in doubt--Leach and Greenspan have agreed to continue it voluntarily. Gramm, however, hadn't followed Leach's lead in inviting Greenspan to visit.
The budget bill that is expected to become law soon would extend until May the Humphrey-Hawkins testimony, plus other government agency reporting requirements that Congress voted four years ago to terminate. That means Greenspan's February testimony is guaranteed, but a mandatory July appearance is still in doubt.
Gramm declined at the end of the legislative session to act on a House-passed bill to extend Humphrey-Hawkins permanently. Gramm's committee might consider the measure next year, a spokeswoman for Gramm said.
Stocks and bonds have soared or plunged after some of Greenspan's Capitol Hill appearances, making his Humphrey-Hawkins testimony a can't-miss event for Fed-watchers.
The Humphrey-Hawkins law requires the Fed to set monetary policy "so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates." That mandate remains; only the reporting requirement was to expire at the end of this year, part of a 1995 effort by the Republican-led Congress to eliminate what many members considered to be needless or excessive agency reports.