Sponsors
The bill would liquidate the Federal Reserve to transfer assets to the Treasury and provide limited worker protections and reporting, but it poses very large risks to macroeconomic stability, financial‑system functioning, public liabilities, and transitional costs.
Taxpayers: liquidation proceeds from winding down the Federal Reserve would be transferred to the Treasury General Fund, increasing federal receipts available for public use.
Federal Reserve Board and Reserve Bank employees: accrued compensation and benefits would be paid during the wind‑down, protecting near‑term pay and retirement accruals for those workers.
Congress and the public: Congress would receive an 18‑month implementation report on remaining issues, improving transparency about the wind‑down process.
Middle‑class families, small businesses, taxpayers, and financial institutions: abolishing the Federal Reserve would remove central‑bank functions (monetary policy, oversight, and lender‑of‑last‑resort), risking higher inflation, interest‑rate volatility, weakened supervision, and greater likelihood of bank runs or credit freezes.
Financial institutions and taxpayers: mandating liquidation 'as expeditious as practicable' could force asset sales at unfavorable prices, lowering recoveries and potentially disrupting financial markets.
Taxpayers: transferring Federal Reserve liabilities (including retiree benefits and other obligations) to the Treasury could raise federal liabilities and put pressure on public budgets or taxpayers.
Based on analysis of 2 sections of legislative text.
Introduced March 5, 2025 by Mike Lee · Last progress March 5, 2025
Abolishes the Board of Governors of the Federal Reserve System and every Federal Reserve Bank, with those institutions ending at the close of one year after enactment. During that one-year wind‑down the Chair of the Board manages staffing, pay, benefits, and assets/liabilities to wrap up affairs, and the Office of Management and Budget must liquidate all Board and Reserve Bank assets to maximize returns to the Treasury. All accepted claims and redemption of Federal Reserve bank stock are paid from liquidation proceeds; remaining net proceeds are transferred to the Treasury’s General Fund. Any outstanding liabilities at abolishment — including retirement and employee benefits — become liabilities of the Secretary of the Treasury and are to be paid from amounts deposited in the General Fund (those deposited amounts are appropriated for that purpose). A joint report to Congress on implementation and unresolved matters is due 18 months after enactment.