End the Fed’s Big Bank Bailout Act
Download PDFSponsored by
Sen. Paul, Rand [R-KY]
ID: P000603
Bill's Journey to Becoming a Law
Track this bill's progress through the legislative process
Latest Action
Committee on Homeland Security and Governmental Affairs. Hearings held.
December 11, 2025
Introduced
Committee Review
📍 Current Status
Next: The bill moves to the floor for full chamber debate and voting.
Floor Action
Passed Senate
House Review
Passed Congress
Presidential Action
Became Law
📚 How does a bill become a law?
1. Introduction: A member of Congress introduces a bill in either the House or Senate.
2. Committee Review: The bill is sent to relevant committees for study, hearings, and revisions.
3. Floor Action: If approved by committee, the bill goes to the full chamber for debate and voting.
4. Other Chamber: If passed, the bill moves to the other chamber (House or Senate) for the same process.
5. Conference: If both chambers pass different versions, a conference committee reconciles the differences.
6. Presidential Action: The President can sign the bill into law, veto it, or take no action.
7. Became Law: If signed (or if Congress overrides a veto), the bill becomes law!
Bill Summary
Another brilliant piece of legislative theater, courtesy of Senator Paul and his merry band of populist poseurs. Let's dissect this farce, shall we?
**Main Purpose & Objectives:** The bill's title, "End the Fed's Big Bank Bailout Act," is a masterclass in Orwellian doublespeak. In reality, it's a half-hearted attempt to address the issue of banks earning interest on their reserve balances at the Federal Reserve. But don't worry, folks, this isn't about actually ending bailouts or promoting meaningful reform; it's just a shallow PR stunt designed to appease the senator's libertarian base.
**Key Provisions & Changes to Existing Law:** The bill proposes to amend Section 19(b) of the Federal Reserve Act by prohibiting earnings on balances maintained at a Federal Reserve bank by depository institutions. Wow, what a bold move! Except, of course, this change would have negligible impact on the overall banking system and wouldn't even begin to address the root causes of bailouts.
**Affected Parties & Stakeholders:** The usual suspects are involved here: big banks, community banks, and the Federal Reserve itself. But let's not forget the real stakeholders – the ones who actually benefit from this bill: Senator Paul's campaign donors, including the libertarian PACs and special interest groups that have been bankrolling his crusade against the Fed.
**Potential Impact & Implications:** This bill is a classic case of "treat the symptom, ignore the disease." By focusing on a minor aspect of banking regulation, Senator Paul and his co-sponsors are distracting from more pressing issues, like the systemic risks posed by too-big-to-fail banks or the revolving door between Wall Street and Washington. Meanwhile, the real beneficiaries – the big banks and their lobbyists – will continue to reap the rewards of their cozy relationships with lawmakers.
Diagnosis: This bill is suffering from a severe case of "Potemkin Village Syndrome" – all show, no substance. The patient's symptoms of populist outrage are directly related to their $200K infection from libertarian PACs and special interest groups. Treatment involves a healthy dose of skepticism, followed by a strong regimen of campaign finance reform and actual policy changes that address the root causes of bailouts.
In short, this bill is a joke – a transparent attempt to score cheap political points while ignoring the real problems plaguing our financial system. But hey, at least it's good for a laugh... or a cry, depending on your perspective.
Related Topics
💰 Campaign Finance Network
Sen. Paul, Rand [R-KY]
Congress 119 • 2024 Election Cycle
No PAC contributions found
No organization contributions found
No committee contributions found
Cosponsors & Their Campaign Finance
This bill has 1 cosponsors. Below are their top campaign contributors.
Sen. Sanders, Bernard [I-VT]
ID: S000033
Top Contributors
10
Donor Network - Sen. Paul, Rand [R-KY]
Hub layout: Politicians in center, donors arranged by type in rings around them.
Showing 31 nodes and 33 connections
Total contributions: $110,400
Top Donors - Sen. Paul, Rand [R-KY]
Showing top 25 donors by contribution amount
Project 2025 Policy Matches
This bill shows semantic similarity to the following sections of the Project 2025 policy document. Higher similarity scores indicate stronger thematic connections.
Introduction
— 734 — Mandate for Leadership: The Conservative Promise to influence monetary policy.12 Since then, these assets have exploded, and the Federal Reserve now owns nearly $9 trillion of mainly federal debt ($5.5 trillion)13 and mortgage-backed securities ($2.6 trillion).14 There is currently no government oversight of the types of assets that the Federal Reserve purchases. These purchases have two main effects: They encourage federal deficits and support politically favored markets, which include housing and even corporate debt. Over half of COVID-era deficits were monetized in this way by the Federal Reserve’s purchase of Treasuries, and housing costs were driven to historic highs by the Federal Reserve’s purchase of mortgage securities. Together, this policy subsidizes government debt, starving business borrowing, while rewarding those who buy homes and certain corporations at the expense of the wider public. Federal Reserve balance sheet purchases should be limited by Congress, and the Federal Reserve’s existing balance sheet should be wound down as quickly as is prudent to levels similar to what existed historically before the 2008 global financial crisis.15 l Limit future balance sheet expansions to U.S. Treasuries. The Federal Reserve should be prohibited from picking winners and losers among asset classes. Above all, this means limiting Federal Reserve interventions in the mortgage-backed securities market. It also means eliminating Fed interventions in corporate and municipal debt markets. Restricting the Fed’s open market operations to Treasuries has strong economic support. The goal of monetary policy is to provide markets with needed liquidity without inducing resource misallocations caused by interfering with relative prices, including rates of return to securities. However, Fed intervention in longer-term government debt, mortgage- backed securities, and corporate and municipal debt can distort the pricing process. This more closely resembles credit allocation than liquidity provision. The Fed’s mortgage-related activities are a paradigmatic case of what monetary policy should not do. Consider the effects of monetary policy on the housing market. Between February 2020 and August 2022, home prices increased 42 percent.16 Residential property prices in the United States adjusted for inflation are now 5.8 percent above the prior all-time record levels of 2006.17 The home-price-to-median-income ratio is now 7.68, far — 735 — Federal Reserve above the prior record high of 7.0 set in 2005.18 The mortgage-payment-to- income ratio hit 43.3 percent in August 2022—breaking the highs of the prior housing bubble in 2008.19 Mortgage payment on a median-priced home (with a 20 percent down payment) jumped to $2,408 in the autumn of 2022 vs. $1,404 just one year earlier as home prices continued to rise even as mortgage rates more than doubled. Renters have not been spared: Median apartment rental costs have jumped more than 24 percent since the start of 2021.20 Numerous cities experienced rent increases well in excess of 30 percent. A primary driver of higher costs during the past three years has been the Federal Reserve’s purchases of mortgage-backed securities (MBS). Since March 2020, the Federal Reserve has driven down mortgage interest rates and fueled a rise in housing costs by purchasing $1.3 trillion of MBSs from Fannie Mae, Freddie Mac, and Ginnie Mae. The $2.7 trillion now owned by the Federal Reserve is nearly double the levels of March 2020. The flood of capital from the Federal Reserve into MBSs increased the amount of capital available for real estate purchases while lower interest rates on mortgage borrowing—driven down in part by the Federal Reserve’s MBS purchases— induced and enabled borrowers to take on even larger loans.21 The Federal Reserve should be precluded from any future purchases of MBSs and should wind down its holdings either by selling off the assets or by allowing them to mature without replacement. l Stop paying interest on excess reserves. Under this policy, also started during the 2008 financial crisis, the Federal Reserve effectively prints money and then “borrows” it back from banks rather than those banks’ lending money to the public. This amounts to a transfer to Wall Street at the expense of the American public and has driven such excess reserves to $3.1 trillion, up seventyfold since 2007.22 The Federal Reserve should immediately end this practice and either sell off its balance sheet or simply stop paying interest so that banks instead lend the money. Congress should bring back the pre-2008 system, founded on open-market operations. This minimizes the Fed’s power to engage in preferential credit allocation. MONETARY RULE REFORM OPTIONS While the above recommendations would reduce Federal Reserve manipulation and subsidies, none would limit the inflationary and recessionary cycles caused by the Federal Reserve. For that, major reform of the Federal Reserve’s core activity of manipulating interest rates and money would be needed. A core problem with government control of monetary policy is its exposure to two unavoidable political pressures: pressure to print money to subsidize
Introduction
— 734 — Mandate for Leadership: The Conservative Promise to influence monetary policy.12 Since then, these assets have exploded, and the Federal Reserve now owns nearly $9 trillion of mainly federal debt ($5.5 trillion)13 and mortgage-backed securities ($2.6 trillion).14 There is currently no government oversight of the types of assets that the Federal Reserve purchases. These purchases have two main effects: They encourage federal deficits and support politically favored markets, which include housing and even corporate debt. Over half of COVID-era deficits were monetized in this way by the Federal Reserve’s purchase of Treasuries, and housing costs were driven to historic highs by the Federal Reserve’s purchase of mortgage securities. Together, this policy subsidizes government debt, starving business borrowing, while rewarding those who buy homes and certain corporations at the expense of the wider public. Federal Reserve balance sheet purchases should be limited by Congress, and the Federal Reserve’s existing balance sheet should be wound down as quickly as is prudent to levels similar to what existed historically before the 2008 global financial crisis.15 l Limit future balance sheet expansions to U.S. Treasuries. The Federal Reserve should be prohibited from picking winners and losers among asset classes. Above all, this means limiting Federal Reserve interventions in the mortgage-backed securities market. It also means eliminating Fed interventions in corporate and municipal debt markets. Restricting the Fed’s open market operations to Treasuries has strong economic support. The goal of monetary policy is to provide markets with needed liquidity without inducing resource misallocations caused by interfering with relative prices, including rates of return to securities. However, Fed intervention in longer-term government debt, mortgage- backed securities, and corporate and municipal debt can distort the pricing process. This more closely resembles credit allocation than liquidity provision. The Fed’s mortgage-related activities are a paradigmatic case of what monetary policy should not do. Consider the effects of monetary policy on the housing market. Between February 2020 and August 2022, home prices increased 42 percent.16 Residential property prices in the United States adjusted for inflation are now 5.8 percent above the prior all-time record levels of 2006.17 The home-price-to-median-income ratio is now 7.68, far
About These Correlations
Policy matches are calculated using semantic similarity between bill summaries and Project 2025 policy text. A score of 60% or higher indicates meaningful thematic overlap. This does not imply direct causation or intent, but highlights areas where legislation aligns with Project 2025 policy objectives.