WASHINGTON — The Federal Reserve is paying a record $78.4 billion to the U.S. government, reflecting gains from the central bank’s unconventional efforts to lift the economy.
The payment to the Treasury Department for 2010 is the largest since the Fed began operating in 1914. It surpasses the previous record of $47.4 billion paid in 2009, the Fed said Monday.
The bigger payment mostly came from more income generated by the Fed’s massive portfolio of securities, which includes Treasury debt and mortgage securities.
Critics in Congress have expressed concerns that the Fed’s purchases could put taxpayers at risk by reducing the amount turned over to Treasury. The Fed is funded from interest earned on its portfolio of securities, not by Congress.
After covering its expenses, the Fed gives what is left over to the Treasury Department.
Income from the Fed’s portfolio of securities came to $76.2 billion last year, up from $48.8 billion in 2009, officials said. Such income rose largely because the Fed bought more securities. Increases in the value of securities also played a role.
In early November, the Fed launched a program to bolster the economy by purchasing $600 billion worth of Treasury debt through June. The program aims to boost the economy by lowering rates on mortgages and other loans and by lifting stock prices.
Republicans in Congress and others say the Fed is printing money to pay for the U.S. government’s deficits and debt.
