OTHER NEWS - April 17, 1996

Greenspan Defends Fed’s Spending Habits: The Federal Reserve Board chairman told the General Accounting Office that his agency kept costs under control despite an increased workload. In a letter to the GAO, which recommended that the Fed keep a tighter reign on its purse strings, Alan Greenspan said the Fed “has been very effective” at keeping control of its operating expenses. The GAO, Congress’ investigative arm, found that the central bank’s expenses surged 50% to $2 billion in 1994 from $1.36 billion in 1988. The agency recommended that the Fed put on the brakes and consider merging offices, trimming management and taking other steps to cut costs. The report was released as Congress considered whether to approve Greenspan’s nomination to a third term.