adjourned. mr. foote: thank you, mr. chairman. [captions copyright national cable satellite corp. 2021] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> i hearing on arizona's audit of the 2020 election tonight at 9 p.m. eastern here on c-span or any at c-span.org and the free c-span out video app. -- c-span now video app. c-span is your unfiltered view of government funded by these companies and more including cox. >> cox is committed to providing eligible families access to affordable internet through a program. bridging the digital divide one at a time. cox, bringing us closer. >> cox supports c-span as a public service with these other providers, giving you a front receipt to democracy. -- front row seat to democracy.

>> brian chung is a reporter for yahoo! finance reporting on economic and banking for the federal reserve since 20 he has done this. brian: good morning. pedro: we saw president biden talking about the debt ceiling but amongst members of the, what is the importance of those institutions with the current discussion in washington? brian: when it comes to the debt ceiling, the stakes couldn't be larger. a default would have massive consequences and not just here for our economy but around the world and when you think about the debt ceiling, you have to consider what it is is a constraint on the ability of the u.s. treasury to issue a new debt and accumulate. it has been put in place by spending that was previously authorized so the treasury has

its hands tied. we know janet yellen has been pressing for months on congress to do something about the debt ceiling knowing that it was reinstated effective in august. with the treasury not being able to pay its bills, internally, it will not be able to do that past october 18. it is currently tapping into the extraordinary measures to pay off those bills and as a reminder, the bills look like u.s. treasury so the debt the u.s. treasury issues in the form of bonds which might be held here or abroad, if the u.s. government cannot pay those interest payments and pay what it owes on the debt, it is possible that we could get a downgrade. we saw s&p do something even though the debt ceiling was resolved in 2011. maybe something similar happens in this case if the dysfunction continues and if that were to happen, a failure to pay the debt could lead to a further

downgrade and contagion and the treasury market which is the most liquid in the world you'd reminder it is risk-free and basically every other financial market is indexed to it. it is not that exaggerated to say that stakes are so large and that is why you heard the secretary use words like economic catastrophe and calamity to describe what is at rest. brian: when it comes to the organizations that monitor the country's credit rating, who are those and how are they looking at the united states these days? they are independent, private assessors of the credit worthiness not just of sovereign nations like the united states but corporate ratings as well. they are supposed to be the most trusted names in the finance industry for the ability of any entity to repay debt that it has issued. when it comes to the united states, with the exception of

s&p, they give the united states the highest marks when it comes to the ability to repay debt. s&p in 2011 downgraded the united states from a aaa to a aa+ so a good rating but at the time, they cited the dysfunction in washington and the ability to respond to the debt ceiling as a reason to downgrade. as far as the current situation, we have heard from all of the agencies, none have them have hit the panic button but have said or should be room for caution. moody's was saying they are holding their outlook on the u.s. in a aaa rating but " we believe the democratic party will use the resolution process to raise the debt limit in time to avoid an interest payment missed" and that was a few days before the mitch mcconnell update that he would compromise on a short-term resolution to the debt ceiling crisis but then we saw yesterday they were questioning the ability of the

willingness of the democrats to take up that deal, although we have seen them bending over over the next 12 hours. we will see if any of these agencies have any update. we're looking to see that. pedro: you talked about the treasury department and the measures they take or what they can do during the time in the federal reserve. how do they look at that situation and what actions if any could they take? brian: this is a tricky situation because the federal reserve is independent and control monetary policy. they are not the ones that will commit to issue debt. there has been focused on the money printing done by jay powell and the federal reserve but that is a separate issue. that is something that applies in the hands of the u.s. treasury and janet yellen. because of the stakes and the possibility of a default of the world's largest economy, it has been the purview of the federal reserve to offer commentary on what the stakes might be to the

economy if that happened so i think you hear commentary from jay powell, not so long ago, saying congress should act to address the debt ceiling and make sure the united states can pay its bills to stop there -- offer their recommendation on how to do that, saying they should raise the debt ceiling which i think is something we saw at the roundtable with the white house is a prevailing view among the wall street and the economist community. pedro: he is a reporter for finance -- yahoo! finance. if you want to ask him questions, you are invited to call (202) 748-8001 for republicans, (202) 748-8000 for democrats, and (202) 748-8002 for independents.

you report on matters of the economy. what are those leaders in washington and wall street or otherwise looking at as far as decisions made here and how it might the longer-term economy as it stands? brian: you have to understand in the macro picture we are in a situation where we are trying to climb out of the hole we have from the pandemic last year. there are still millions out of the labor force compared to pre- pandemic levels of february 2020 and the federal reserve and fiscal policy makers are trying to figure out how to get some of those people to come back into the workforce especially with the pandemic raging, the delta causing a slowdown. you take a look at the more recent jobs reports, there were misses compared to what wall street was hoping for with the amount of jobs that were recovered in the last months of the summer. when you compound that on pond

--upon the risk of default in the world's largest economy, as far as the downside goes, the risk is something that not just economists but investors are watching. you had a few good positive days this week although you will recall a few days over the last few weeks where we saw 400 point declines on the dow index so obviously investors are getting generate because of the aggregate downside risk to the u.s. economy we are seeing right now but if the debt ceiling issue is resolved or ticked down the road, investors have short-term confidence over the next few months, delta cases taking down, that might be a positive headwind. maybe another variant will crop up in the future and that underscores the uncertainty that the economy remains a persistent issue for anyone watching the stocks.

pedro: we will see the labor department release information tomorrow as far as jobs. any snapshots or indications of other sectors of what that report might look like? brian: when we talked about the job gains, there are millions of people out of work compared to pre-pandemic levels. tomorrow covers the month of september. we will plug the remaining gap and it seems like the prevailing function is that the labor market slowdown has been a bit slower in these parts of the month than they were earlier in the summer in late spring where there was optimism we would see at least one million payroll gains per report. at that point, i do not believe we have seen payroll jobs report over the course of the summer that has clocked in at one million for a single month though it seems like maybe we should expect something lower for that. wall street is all over the place in terms of what to estimate for the jobs report tomorrow but it seems the federal reserve, as long as that

is a positive number, -- keep in mind the federal reserve has been applying assets through quantitative easing. it is $120 billion a month in and keeping interest rates near zero. whether the federal reserve gets are greenlight to peer back the programs by slowing the pace of this asset purchases, it is something that could happen depending on the income -- outcome of the report. pedro: our first call is from montgomery, alabama, a democrat, john. you're on with our guest good -- guest. john: good morning. i guess my comment is the disparity in the amount that red and blue states contribute to national gdp. predominantly, at least half of

the states, mostly red states, their state budgets are maced -- made up of 30 to 35 percent federal money so i find it highly critical that gop representatives would hem and haw about the debt and putting money on the credit card and all of that when their states are literally depending on federal dollars. i live in a state where we have so much poverty, 98-99% of our school districts qualify for federal money to get free lunch to the students. yet we have people in the state and people across the country that are republican that pretend as if all money from the federal government is bad and they have all the answers. yet they have no answers for how to solve these problems and how to address it. capitalism has not done it. trickle has not done it. the free market has not done it. they're concerned about not

doing it. maybe if your guest could illustrate the distinction between how much they contribute versus take, maybe it will open someone's eyes and let them see that it is a fools aaron to pretend the republicans have some type of high ground. brian: it is definitely a salient point that spending has already been authorized and will be dependent on where you are in the country and in the aggregate, there is a total amount of debt we have accumulated but it will look different in the pace of spending and what we are spending on can be different and dependent on what we are looking at. it is important to draw a distinction between state spending and budgets that are controlled by state legislatures and the overall federal debt so

obviously municipal governments control the local city you live in or the state you reside in, they will have the own -- their own budget terry approached -- budgetary approach. that is what we are debating here when it comes to the debt ceiling and the issues of paying our bills. there is federal spending. we can draw that delineation and a separate conversation but they are fighting different types of conversations here although on the aggregate level, spending on a state level points up to where we are as a nation with how much that we are accumulating. pedro: plain blue, new york -- plainview, new york, republican lined. -- line. >> i was wondering at what you thought about janet yellen's proposal to have -- look at

banks that have transactions of $600. why are we now not annexed exporter -- a net exporter of oil? joe biden asked opec to raise oil production. this contradicts his green energy agenda. brian: on the first point, i believe you're referring to the proposal from janet yellen, part of any sort of new bill that would be passed by congress to have banks that would report transactions or activity in a bank account of over $600 to the irs. it is important to know this would be information the banks would be reporting to the irs and the treasury said this would be a way to closely track any sort of possible tax evasion if people were trying to start the ability to pay taxes by fragmenting their deposit in $600 or less increments which may not call -- fall into the purview of the law.

this is a contentious pocket does topic. community bankers say this would be a burden and customers are worried this would increase the amount of government information they have and government insight into their personal transactions. janet yellen was consistent they are not going to track individual transactions. they want to collect what she described as more pieces of information with regard to the way banks are reporting to the irs. any accounts that are open that have more than $600. this is a big push and pull. we have seen the secretary when pressed by lawmakers about whether she was open to changing this, seemed pretty adamant about not wanting to change it but community bankers are not happy about this because the lobby is pushing back. we will see as the day happens on capitol hill if that changes. pedro: joe from pittsburgh, pennsylvania. independent line appear to -- line.

joe: two points. i still wish we could have --i don't think having democrat, republican, or independent helps. people think you are biased against you as soon as you call in. brian, if you have a brother or sister or a child that kept borrowing money and borrowing money and spending more than they made, would you let them do that? would you try to control spending? why do we allow the country to do that? brian: i think this brings up the question of why the united states has a debt ceiling and i think we need to first of all draw a distinction between the ability of the government to spend and personal households. it is not as comparable as a person having a credit line because the government -- the u.s. is the strongest creditor in the world. their constraints are not the same as household constraints.

i do think it is a salient point that when it comes to spending and the ability to rack up your debt, that should --and the reason the debt ceiling exists as a method the country has been using since the 1910s i believe, so it has been deployed over the last 100 years, is to have some sort of constraint on government spending but it is important to note the debt ceiling itself does not constrain the spending. it constrains the ability of the u.s. treasury to issue the debt to cover the bills that have racked up. it is weird. it is a statutory limit that does not control the spending itself. there are questions from an existential point about whether the debt ceiling would be better served by an alternative mechanism that controls the number in a budget reconciliation you can have as opposed to the ability of the treasury to pay its bills.

that is why the secretary said she would support abolishing the debt ceiling. you heard more interesting proposals like missing -- minting a platinum coin which would be within the law of the treasury's authority to meant a platinum coin that would be able to absorb $1 trillion of debt. it would be held by the federal reserve and taken up against the ballot sheet and --balance sheet and wipe out the existence of $1 trillion of debt. the treasury secretary says this is not a feasible idea and it is a gimmick so it is unlikely we will see that but this is why we have a conversation about the debt ceiling as a mechanism separately from work -- whether you believe the debt stock is unstable and i think that could be if we kick the can down the road to december. pedro: a viewer from mississippi

asked what you mean when you say the federal reserve is an independent entity. brian: it is an important question. the federal reserve had a nice, shiny building off constitution avenue. it was forged by the federal reserve act over 100 years ago. its structure allows it to be independent from the perspective that even though -- when you hear jay powell, he is nominated by the white house and confirmed by the senate. so are the other members of the board of governors in d.c. the bank itself does not report to the white house. jay powell does not go to the white house on a regular basis and discuss with the president with a game plan is with how to engineer the economic policy. the federal reserve sits independently. they are not subject to the demands of the dashboard or wants or the needs of the president regardless of whether it is a republican or democrat that is in the white house.

they make their policy decisions independently. this is important because id -- idea of a federal reserve is to stabilize policy. if there were to be unseen charts like a pandemic -- shocks like a pandemic, the federal reserve can use its tools to make sure that the economy since this -- can sustain employment and hold prices to make sure inflation is not out of control and make sure there are financial stability rests bubbling up in the banking system since that is a primary need by which the federal reserve implements its policies through the banking system. independent is something we have heard the fed chairman talk repeatedly about. that was during the trump administration when they were concerned the trump administration was trying to heavy-handed the federal reserve into lowering interest rates during the trade war. here it within the context now of whether the chairman should try to change policy with

regards to higher inflationary pressures now. it is independently controlled and operated by the federal reserve. pedro: you hinted at this earlier but how does the fed change in operation after did the 2007 financial crisis and is there a sense a could return to the previous mode of operation? brian: there are a number of types of modes of operation if you will but one interesting point is the authority. the federal reserve has the ability during crisis to do more extraordinary measures in opening up lines of credit or lending facilities they can use to backstop certain markets that might be spinning out of control. you will take in 2020 when the pandemic was first raging, there was a lot of concern about the ability of municipal governments to be able to finance shortfalls in their budget. we saw there were issues with municipalities being able to collect tax revenues with the

government -- economy shut down. the federal reserve opened up a municipal liquidity facility to offer lines of credit to essentially those municipalities that might be struggling. they did something similar for corporations through credit fa cilities. they offer the ability to take up corporate debt in exchange for the quiddity during the crisis. these types of authorities are something the fed had to do in 2007 part in the following years after the crisis, there were restraints on the federal reserve that required them to sign off from the u.s. treasury and the white house to be able to do this type of lending. they could use their own money and would not be able to stave major losses on any facilities they opened up, which the reason why the fed set up the facility and other backstops last year, they had to do so in conjunction

with the treasury in had to get authorization through congress by the cares act to do that type of lending so the federal reserve in 2020, we had more of a congressional process to go about doing some of its emergency response to the crisis, but as we saw through 2020, we avoided a financial crisis. human toll was a separate story but the federal reserve and the congress through the cares act was able to avoid a real massive financial market contagion. pedro: this is yahoo! finance. jeff on the republican line from nebraska. jeff: aren't there certain things that have to be paid? i was listening to mark levin and he said there has to be $45 billion paid on interest and the military has to be paid so nobody -- they get to a point

where in order to default, they have to go outside certain things but there is no way we're going to go bus because there are certain things that have to be paid. one other item, if i could -- they reported that there were 25, maybe 30 states that hadn't even requested certain moneys out there because there was so much out there. people are not even -- the states don't even know what they have out there to spend, there is so much money. brian: on the first bit, i was going to point out that it is the case that the treasury has immediate bills to pay that are not just playing inch -- paying interest on those holding u.s. treasuries. the treasury is responsible for getting security payments out

there. it is responsible for getting child tax credit payments out there. military families get those from the treasury. i want to point out that all of those things in addition to u. s. -- us treasury bond payments are being paid right now but the exit of the u.s. treasury that by the time they reach october 18 which could be a few days from the estimate, they may not be able to pay those bills which is a reason why you heard the treasury secretary say it is those types of things, child tax credit and social security payments, that could be at risk past october 18. the debt ceiling was reinstated in august but over the last few months, the treasury has been tapping into what they call their cash reserve in addition to their extraordinary measures. they can defer payments to me payments external to the government and that is what they have been doing but again, we

only have a week and a half before the treasury --we will be able to meet some of those payments that would be devastating for those that rely on the paychecks. pedro: someone in jersey asking you to explain it since the u.s. has the ability to print our own money, why is there no danger of print -- paying our own bills? should inflation become a concern? brian: this is an important question. the united states operates on a fiat currency basis by the federal reserve does print money but it is important to recognize that when it comes to the debt stock itself, the bills the treasury has racked up, the debt ceiling has been a restraint on the ability of the government to effectively continue to infinitely increase the debt so they would be able to issue more debt. when it comes to the federal reserve, we have to understand their role -- they do not talk to the treasury to say, "if you

have payments you cannot make, we can print the money for your route --you to be able to pay off those bills." that cannot happen because if that were a way to start around the debt ceiling negotiations, there would be no purpose to the debt ceiling. it is important to note that when we talk about money printing, it is not necessarily the quantity of dollars. the way it operates now and it has been different but the way the federal reserve operates now is money comes into the system via lower interest rates. money comes into the system via quantitative easing in the fed absorbs assets that are out on the financial market and puts it on a balance sheet inputs liquidity into the economy. the way the federal reserve does that, which they have the authority to do, is by assessing economic conditions, whether if they put too much money into the system through lower interest rates and quantitative easing, whether that could increase the speed by people -- by which people and firms are spending

the money in the economy, which could raise inflation. on the first point of your question, it is not within the purview of the federal reserve to meet the u.s. government obligations on its debt. the treasury is the one that handles and issues debt to they are the ones that are in charge of that and they can't do money printing, which is the reason why congress has to handle the situation. on the second question of inflation, inflationary numbers are certainly high. when you take a look at consumer price index oerbke -- personal consumption, these are numbers of inflation. a lot of these readings are breaking records. we have not seen these year-over-year price increase percentage points since the 1990s when you look at headlines cpi. the concern is --and it is not double-digit inflation. it is not 10% inflation. receiver for -- we see 4-5%.

inflationary pressures are rising. economists are saying these might be idiosyncratic issues. micro trips coming out of east asia slowed because of foreclosures and the pandemic in the factory shutdown. that has led to used car prices being increased because cars cannot be manufactured. those prices have been in alleviate it. economists have said delta subsiding means inflationary pressures coming down so these readings by many federal reserve of issues -- officials believe the pressures are high but they hope they will come down soon. pedro: let's hear from dan in columbia, maryland. republican line. dan: good morning. i'm thinking of the debt the u.s. has and how the government works. it is like we have two football teams, each one keeping the other one from scoring and we do

not make any headway in the situation. maybe if they had an ominous voting in the chain --anonymous voting in the chambers of the congress and the senate, people would be more honest in their voting for the american people and we could get something under control and done quicker. thank you. pedro: let's go to the weeds -- louise in raleigh, north carolina, democrat. louise: i have a solution on how to pay them things -- for things. . senator mccarthy and the congress after world war ii change the laws. i think that should be changed especially since not too long ago, the catholic church had thr eatened president biden to hold

communion if he did not change his stance on abortion and that is a blatant threat over politics. i really think that if biden changed things and said churches need to --were exempt from paying taxes, that would influence policy and the pope would get involved, at least for a number of years, that they shouldn't have to pay taxes and that would help our economy. pedro: that is louise in raleigh, north carolina. on the larger aspect of taxation from industries on wall street and other sectors, they are still waiting to see what this new tax structure might look like from the white house concerning how to pay for the proposed plans from the biden administration. what are the sectors expecting and how are they preparing? brian: we just need to decouple that from the debt ceiling issue again. when we talk about paid for its -- paid-fors and the ability to

score a lower economic impact of what could be a lofty, ambitious infrastructure package and something that is important but separate from the issue of the debt ceiling but on the point of whether taxation changes could come for the corporations, what is interesting is everything is being used against the 2017 tax cut that was put in place by the trump administration, which lowered tax rates for corporations. i think what is interesting is you have seen a number of corporations and leaders say they are ok with seeing an increase in the corporate tax rate relative to where the trump administration had slashed it to in 2017. they would not want to see anything to substantially larger than it was before the tax cuts. it will depend what kind of corporation you're talking to. companies might be more able to withstand a higher tax rate

based on the medium-sized smaller companies, but by and large, it seems there is some willingness within corporate leaders that have met with biden before who say they are ok paying more in taxes so we will see what gets yielded out of the infrastructure package and possible spending and paid fors. there are a lot of details to work out but it seems like on the whole, business leaders are not wholesale against the idea of possible corporate tax rate increase. pedro: earlier this week, you reported the federal reserve itself has what is described as a trading scandal going on. could you explain this? brian: this is a big deal. i was describing earlier the independence of the federal reserve but the boat has been rocked with trading that was done by at least three senior fed officials. the revelations came out by the wall street journal in bloomberg

earlier in september, first regarding the regional bank presidents, the boston fed president and the dallas fed president who made large transactions over the course of 2020. this is a big deal because the fed has some on the macroeconomic policy on the united states and both of these men were in the room, very small room, when they were deciding when to step into say the economy once the spiraling began in the spring of 2020. the boston fed president was making these remarks about how real estate could be hard-hit by the covid crisis, warning about possible defaults in commercial real estate during that time, he was buying steak in real estate investment trusts in the dallas fed president was taking multimillion dollar bets in public companies, individual stocks. he was betting on apple, for example. he brought ishares for an etf

even though the federal reserve has an in norma's amount of influence over rates and another shoe to drop this weekend was a report from bloomberg detailing disclosures from earlier this year about the highest profile official indicated so far in this scandal. apparently he was making a number of transactions over the course of 2020, rotating out of a bond and interest -- into stocks right before the fed announced it was going to new what it could to save the economy in late february 2020. he announced early retirement and step down last week. no update on the other but you see the writing on the wall. this is an optics issue for the fed and they are trying to do a review of these issues. no word from the sec about whether they are investigating this as insider trading but not a really good thing for the federal reserve. pedro: senator elizabeth warren

of massachusetts called for an investigation and expressed a lack of confidence in the federal reserve chairman jay powell. what impact might that have on his job? brian: this is all coming during a really critical time for the fed chairman. he has been at the top of the central bank since february 2018. he was nominated by president trump to serve in that role confirmed by the senate on a good basis. his term ends in february of next year which means the white house right now is weighing whether they want to renominate him for another term. janet yellen did not get a second term because the trump administration wanted their mark on the federal reserve by nominating somebody fresh. whether or not powell could convince the white house to get a renomination remains to be seen by the optics of this -- the trading issues do not seem to be helping the case on the margin. one big question is whether or not they will go with an alternative person when it comes to the white house thinking on this.

a governor who has been a champion of someone who might be more progressive. elizabeth warren might favor him since she articulated last week she would not be supporting fed chairman powell renomination if he is picked by the white house. the problem is brainerd, maybe a favorite for progressives, is someone who heads the reserve bank affairs committee within the board of governors that deals with ethics, for example, for the boston in dallas fed's, both of which have leaders implicated in the scandal. what she might be as hopeful as powell is when it comes to the look into handling these ethics issues so it remains to be seen how unbalanced the effects of the horserace for who might not be that fed chairman. pedro: this is richard, spring valley, california, independent line. richard: it sounds like you are

pretty educated in the reserve. you just contradicted yourself constantly. both of y'all do. you contradict yourself constantly. you're saying you want the government to spend $3.5 trillion --joe biden's administration. they will manage this? did you just say they had a scandal in the reserves? sounds like a bunch of crooks. we know that. pedro: that is richard in california. let's go to carla in missouri. independent line. carla: hi. i have a basic question. i don't want to get into the high finance and government finagling. number one, it looks to me like all this debt is just a power grab in washington and they just keep adding more and more government agencies and programs, just to make people

dependent on the government. it sounds like buying votes to me. secondly, regarding the debt, you glossed over this, sir. if we are passing --teresa debt --to raise the debt ceiling on the previous year's debt, what are we going to do next year when we have all this trillions in trillions of dollars worth of bills to be paid? pedro: thank you. mr. chung. brian: when it comes to the accumulation of debt, it is certainly the case that this compromise we are hearing about, if you want to call it that, between mcconnell in the democrats will be to kick the can down to december, or a month or two after that, with regards

to the debt ceiling and this is a conversation we will have again and as long as the debt ceiling is a mechanism put in place, we will continue to have these back and forth in congress. i want to point out i mentioned earlier in the show the debt ceiling is a mechanism put in place since 1917. most of the negotiations put in place in the past in the united states, many times over history, has been met with bipartisan effort to raise the debt ceiling. not always the case. in a lot of cases, both sides of the party have come together to say we acknowledge the debt ceiling is a separate issue from spending. we can constrain spending and try not to increase the amount of national debt that we have by having these discussions when we are trying to debate fiscal spending packages, not through the debt ceiling debate. in this case, there is a

confluence of the things where there is a conflation between the debt ceiling and trying to use that as a political leveraging tool against the biden infrastructure plan, against the republican effort to stall wart those infrastructure plans, in addition to trying to avoid a government shutdown. it is all these government -- things happening at the same time and we have to acknowledge the debt ceiling is a mechanism that continues to be a theme in the years to come, a big reason why a lot of people i think are tired about hearing about this debt because it comes up so frequently and it has become more partisan over the past few decades. pedro: let's go to market in fort lauderdale, florida, democrat. mark: thank you to c-span in the interesting guest. -- and the interesting guest. when elizabeth says there is problems at the federal reserve, there are the federal reserve system, the governors, that you guys you were talking about in

trouble for trading. there is the open market committee that screws around with interest rates and there is the federal reserve bank, which if i understand correctly does all of the clearing of monetary transactions in the u.s. if you think back a few years, the ron paul's of the world running around insisting the federal reserve was not an arm of the u.s. government but owned by a shadowy system of the crowned heads of europe. can you as a net -- expert on the federal reserve answer the question? is the federal reserve bank, is it or is it not part of the u.s. government, part of the u.s. monetary system? brian: i am glad you bring this up. we break down the structure of the federal reserve. what i was describing earlier when i said board of governors, that is the head of the system.

they have a shiny building on constitution avenue in d.c. and have all of their governors and the chairman all nominated by the white house and confirmed by the senate. they operate in washington but they want to have a hold on what is going on across the regions of the economy so they have 12 reserve banks scattered across the country. these are regional ball outpost from boston to san francisco to kansas city to atlanta and they all have jurisdiction over certain regions. the president of those reserve banks converse with business owners and report back to the board of governors in washington, dc. those banks are quas i-independent, quasi-federal. the board of governors is a federal agency because it is in d.c. and does have a structure that requires its heads to be confirmed by the senate.

those presidents are not confirmed by the senate or picked by the white house. they are independent in operation but also independent in kind of their functions because they have boards of directors who determined their leaders. the boston fed president and dallas fed presidents will have their board picked their replacements because they are stepping down. they are private banks by title and then they do not get their funding from any sort of government appropriations out of the federal government in d.c. but they do report up to the board of governors in washington dc. there are weird message -- even though it is independent in atlanta that takes the fed president, the atlanta fed president has to be ratified by the gourd -- board of governors. every five years, they review

the presidents and ratify or approve that the atlanta fed, this board felt this is the person that should lead this institution. there are these controls that make it such where even though the reserve banks are private, they go up to a reporting structure at the federal government level and i think that is interesting. it is dizzying but that is how the federal reserve operates. pedro: you can find the reporting work of our guest at finance.yahoo.com. thank you for joining us. hope you will come back. brian: thank you, pedro. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2021] >> watch the days biggest political events live or on-demand anytime or anywhere on our new app. c-span now. this into c-span radio app and discover new podcasts for free. download c-span now today. ♪

>> coming up tonight on c-span, the house oversight and reform committee hearing on arizona's audit of the 2020 election good watch tonight starting at 9 p.m. eastern on c-span or anytime at c-span.org and the free c-span now video app. on tuesday, representatives from the industry testified on changes to an 1872 mining law before the senate energy and natural resources committee. this is just over two hours.