Sponsor
Mike Lee
Senator · R-UT
Senator · R-UT
The bill would liquidate the Federal Reserve to return proceeds to the Treasury and increase oversight of the wind‑down, but doing so risks severe disruption to monetary stability, market losses, concentrated power in the Treasury, and added taxpayer obligations while displacing Fed employees.
Taxpayers: Liquidating Federal Reserve assets would transfer net proceeds to the Treasury General Fund, potentially raising federal receipts to help pay liabilities.
Taxpayers and Congress: The bill requires an 18-month joint report to Congress on implementation and unresolved issues, increasing oversight and transparency of the wind‑down.
Federal employees: The Chairman must ensure payment of compensation and benefits accrued before positions are abolished, protecting earned pay and benefits during the wind‑down.
Households, businesses, and financial markets: Abolishing the Federal Reserve would disrupt monetary policy and financial system stability, risking higher interest rates, severe market volatility, and broader economic instability.
Financial institutions, investors, and savers: Rapid liquidation of Reserve Bank assets to maximize returns could force fire sales, depress asset values, and produce large losses for banks, investors, and household savings.
Taxpayers and public governance: Transferring central bank functions and liabilities to the Treasury concentrates monetary and fiscal authority, raising governance, conflict-of-interest, and accountability concerns.
Based on analysis of 2 sections of legislative text.
Abolishes the Board of Governors and all Federal Reserve Banks after one year, requires OMB liquidation of assets, and transfers liabilities to the Treasury.
Official title: Abolish the Board of Governors of the Federal Reserve System and the Federal reserve banks, to repeal the Federal Reserve Act, and for other purposes.
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 one year after the law is enacted, and requires an orderly wind-down and liquidation of their assets and liabilities. The Director of OMB must liquidate the Board and Reserve Bank assets to maximize returns to the Treasury, the Secretary of the Treasury assumes outstanding liabilities (including retirement and benefit obligations) payable from amounts deposited in the Treasury General Fund, and the Treasury and OMB must report to Congress on implementation 18 months after enactment.