Former Vice President Mike Pence is calling for an end to the Federal Reserve’s dual mandate, saying the central bank should focus solely on fighting inflation and leave creating jobs to Congress and the president.
The Fed’s dual mandate for price stability and maximum sustainable employment doesn’t serve the US well, Pence said in an exclusive interview with Bloomberg News before a speech Tuesday in New Hampshire, an early Republican primary state.
Pence is considering challenging Donald Trump for the Republican nomination in 2024, but so far hasn’t risen above the low single digits in polling.
“We would do well as a nation to return the Federal Reserve to its historic mission of ensuring sound monetary policy and look after the strength of our currency and let elected officials worry about full employment,” Pence said in the interview.
Narrowing the bank’s scope has long been a key issue for Pence. As a member of Congress in 2010, he introduced legislation to remove its full-employment mandate and have the Fed focus on inflation alone, but it went nowhere. Congress has to approve any changes to the Fed’s mandate.
With no agreement yet between President Joe Biden and House Speaker Kevin McCarthy on raising the debt ceiling, Trump has suggested that Republicans let the US default if they don’t get everything they want. Pence said while McCarthy should insist on the initial budget cuts approved by the House, “defaulting on the debt of the United States of America is not an option.”
Asked about Trump’s contention during a CNN town hall last week that default would have more of a psychological effect, Pence said, “I have to believe it would not be good, particularly at a time that other foreign powers, notably China, are making efforts to replace the American dollar as the reserve currency on global markets.”
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Pence’s remarks regarding the central bank are the latest sign that it will be a target on the 2024 campaign trail, as Fed officials continue to grapple with decades-high inflation and a string of recent bank failures.
“In recent decades, the Fed has usurped an enormous amount of economic power,” he said in prepared remarks at the event hosted by the Josiah Bartlett Center for Public Policy in Concord.
Democrats have also criticized Fed Chair Jerome Powell for his aggressive efforts to tame prices, which they warn could cost millions of jobs and tip the economy into a recession. The Fed has raised rates rapidly to a range of 5% to 5.25% since March 2022, the fastest tightening campaign since the 1980s.
Pence and others largely abandoned the push to narrow the Fed’s mandate when he was vice president to Trump, who pressed Powell to keep rates low to stimulate the economy.
Changing Entitlements
Pence also proposed reforming Social Security and Medicare in his remarks, a contrast to Republicans such as Trump and McCarthy who say the popular entitlement programs shouldn’t be touched.
“Ignoring the problem is no longer an option,” according to the remarks, which didn’t specify what revisions should occur. “Joe Biden’s policy is insolvency. Sadly, so is President Trump’s. And the same can be said of any candidate unwilling to talk about the urgent need to save Social Security before it collapses.”
The former vice president said in the interview that he’d announce before the end of June whether he’s running and sanctioned the formation of a super political action committee by his allies. He’s trying to differentiate himself as a champion of fiscal responsibility and business.
According to his prepared remarks, Pence also called for making the 2017 tax cuts permanent and overhauling the federal permit process for energy, infrastructure and other development projects. He wants to ban the required use of environmental, social and governance principles and permanently end taxpayer bailouts for failing companies.
Finally, Pence wants “free trade for free nations only,” saying “we should do more business with countries that share our values, and less business with countries like China and Russia that want to undermine our way of life.”
(Updates with Pence interview quotes, starting in fourth paragraph.)
