Sens. Rick Scott, Ted Cruz introduce bill to rein in the Federal Reserve

Republican Sens. Rick Scott of Florida and Ted Cruz of Texas have introduced legislation to stop the Federal Reserve from paying banks interest on their reserves, an action they say wastes upward of billions of dollars. 

The Fiscal Accountability for Interest on Reserves Act was introduced Wednesday. 

According to data cited by the senators, the Fed paid more than $186 billion to banks through the Interest on Reserve Balances program in 2024 alone. An additional $1 trillion is expected to be paid out over the next 10 years to banks. 

The senators said the “grossly mismanaged” Fed has been operating at a loss since 2022, with no money remitted to the U.S. Treasury. They say that’s caused by “wasting billions on interest payments to banks and multibillion-dollar building renovations.” 

Rep. Warren Davidson, Ohio Republican, introduced a companion measure in the House. 

Mr. Scott said in a statement, “The Federal Reserve under Jay Powell’s leadership has been a failure to the American people — it has failed to provide the stability, transparency or accountability Americans deserve from the central bank, and has failed to use dollars in the best interests of the American people.

“Jay Powell has already downplayed inflation, rubber-stamped reckless policies, and has fostered a culture of corruption and mismanagement costing taxpayers trillions, while putting the interests of all others before American families.”

The Washington Times reached out to the Federal Reserve, which declined to comment.

The White House and its Republican allies in Congress have targeted Fed Chairman Jerome Powell for his handling of the central bank. President Trump has slammed him for not lowering interest rates, blaming him for Americans struggling financially.

Criticism has grown over the renovations of the Fed’s headquarters in downtown Washington. The over-budget project was first estimated to be $1.8 billion but is now $2.5 billion.

The president visited the under-construction building last week, with the two men debating its price tag, but ended with Mr. Trump saying it was a good tour and that he wouldn’t be firing Mr. Powell.

This isn’t the first time Mr. Scott introduced legislation aiming to hold the Fed “accountable.” He previously introduced the Regular Order for Investments of the Federal Reserve Act, Right Size the Federal Reserve Act, Rein in the Federal Reserve Act and the Federal Reserve Transparency Act, which called for a full audit of the Fed’s board of governors and the regional Fed banks.

The senator criticized Mr. Powell in a letter to the Fed, saying the central bank’s employees need to be held accountable for ethical concerns.