U.S. Democrats have introduced a new bill aimed at making the Federal Reserve add reducing racial inequality to its mission. The legislation was presented Wednesday morning, The Washington Post reported.
Officially named The Federal Reserve Racial and Economic Equity Act, the bill would charge the reserve with taking steps “to minimize and eliminate racial disparities in employment, wages, wealth, and access to affordable credit.”
Written by Sen. Elizabeth Warren, Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Maxine Waters (D-Calif.), the bill is co-sponsored by 18 other Democrats. Among them are Sens. Cory Booker and Bernie Sanders, who both ran for president against Democratic nominee Joe Biden.
According to the report, Biden called for the central bank to take similar action, but the bill will mandate it if passed.
“The Federal Reserve Racial and Economic Equity Act creates a new racial justice mission at the Fed to eliminate racial and economic disparities in all of its work,” Waters said.
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Citing the racial wealth gap that has persisted between Black and white Americans as well as disproportionate unemployment numbers between the two groups, the bill’s proponents said the central bank can do more to even the economic playing field.
“Systemic racism and inequality is not something that happens on its own. It is a result of specific policy choices and the Fed must take deliberate action to fix it,” Warren echoed.
There are some, like KPMG’s chief economist Constance Hunter, who oppose the bill as to lofty of a goal to place solely on the Federal Reserve’s shoulders.
“Isn’t this the job of Congress and, quite frankly, all of us?” tweeted Constance Hunter, chief economist at KPMG. “To put this on the Fed seems to set them up for failure unless the entire rest of the system is organized to help achieve this goal.”
But Raphael Bostic – who as president of the Atlanta Fed is the only Black American in the central bank’s top leadership – said the institution “can play an important role” in ending racism, according to the Post. He added they cannot do it alone, however.
“This is a big issue. It’s been an issue for a long time. It’s an all-hands situation. We’re going to need every one of those hands to participate if we want to make progress in creating better conditions for Black workers,” Bostic said in a an interview in July.
