Bernanke takes GOP heat over housing paper

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"The Fed has been and should continue to be a useful resource for information and analysis on the housing market," he said. "It should not, however, become an active participant in the legislative debate over the future of housing finance. Accordingly, I hope that the Fed’s recent foray into housing policy will not become common practice."

Sen. Bob Corker (R-Tenn.) also noted that the Fed has been "pretty active in giving advice" and suggested that perhaps the Fed should focus its efforts on a report identifying the costs tied to the Dodd-Frank financial reform law, which falls more under its purview.

Bernanke defended the decision to issue the white paper, and maintained that the Fed was not stepping on any toes, noting that the paper laid out a series of options without recommending any particular path. Rather, he maintained that the goal of the paper was simply offer options and "to encourage Congress to look at these issues."

Shelby was not convinced the Fed is staying impartial in the debate, noting recent comments by Fed officials advocating certain housing policies.

"These statements suggest that many at the Fed do in fact have a blueprint for housing market policy. That blueprint appears to involve using the taxpayer-supported GSEs as a piggybank," he said.

Bernanke rebutted, saying that the comments of individual Fed officials are their own opinions and do not represent official Fed policy.

"Of course as you know Fed members often give their views, their own individual views," he pointed out.

In his public comments, Bernanke has long identified the housing market as a key anchor weighing down the economic recovery and said that the Fed has nearly exhausted its ability to boost the economy.

Sen. Jack Reed (D-R.I.) came to the defense of Bernanke at the same hearing, calling the paper "very thoughtful, very analytical and non-prescriptive, which is appropriate."