If you haven’t seen it yet, Rep Michele Bachmann questioned Tim Geithner and Ben Bernanke on 03/25/09 and took a position rarely seen in Washington DC.Â In short, her position is that which is enshrined in the 10th Amendment – “Where in the Constitution are the Treasury and the Fed given such powers?”
Bachmann: What provision in the Constitution could you point to, to give authority for the actions that have been taken by Treasury since March of 08?
Geithner:Â Oh, uh, the Congress legislated in the emergency economic stabilization act a range of very important new authorities..
Bachmann:Â Sir, in the Constitution.Â What in the Constitution could you point to, to give authority to the treasury for the extraordinary actions that have been taken.
Geithner:Â Every action that the treasury and the fed and the FDIC is….been using authority granted by this body…by the Congress.
Bachmann:Â And in the Constitution, what could you point to?
Geithner:Â Under the laws of the land, of course.
Bachmann:Â And if I could move to the federal reserve chair, if you could point to what provision in the Constitution that would give authority to the federal reserve – this has been over 10 trillion dollars that we’re talking about.
Bernanke:Â I don’t know where 10 trillion dollars comes from.Â The congress has the right to authorize funds, which is what they did in the TARP program, and they have given us in the 1930s…they gave the federal reserve the power for emergency lending as a means of addressing financial crises which is what we’ve done.
Bachmann:Â And to the federal reserve chair – Do you believe there are any limits on the authority that the Federal Reserve has taken since last March…of 08?
Bernanke:Â The loans we make have to be fully secured and collateralized.Â We have practical limits in terms of our ability to manage monetary policies.Â So there are obviously limits. We have reported extensively to the Congress on all the actions we have taken, and the actions we’ve taken have been solely and entirely for the purpose of protecting the American economy from the effects of financial collapse.