WASHINGTON -- The Federal Reserve has always valued it independence. In 1982, for example, then-Chairman Paul Volcker rebuffed a visit from President Ronald Reagan, because he didn't want to give the impression that he would slacken his anti-inflation stand.
Today, the Fed's independence is again being scrutinized as a new administration launches its economic agenda. This time, however, the impulse comes from Congress.
Legislative proposals call for videotaping the Fed's key policy-making committee, which meets in private, and releasing the tape 60 days later. One bill calls for the Fed to be audited by Congress.
The most controversial provision would make the appointment of regional bank presidents subject to Senate approval. Currently, those officials are chosen by boards dominated by bankers.
Maryland Democrat Paul S. Sarbanes, a member of the Senate banking committee, says the proposals are not meant to bring the inflation-fighting Fed into line with the government's growth-oriented policies. Instead, they are designed to make the organization more democratic.
"You have private people making public decisions. On what basis are these people making these decisions?" he said.
The Fed has power to control the money supply, a key to priming the economy and fighting inflation. In addition, it partially oversees the U.S. banking system and regulates foreign banks.
It's not clear whether the reforms can be passed this year. In any event, most observers expect some sort of Federal Reserve reform in two to three years.