Politics

Federal Reserve Sends In Largest Earnings on Record for Treasury Securities

Jan. 7: Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill before the Senate Budget Committee. The Federal Reserve says it paid a record $78.4 billion in earnings to the U.S. government last year.

Jan. 7: Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill before the Senate Budget Committee. The Federal Reserve says it paid a record $78.4 billion in earnings to the U.S. government last year.  (AP2011)

WASHINGTON -- The Federal Reserve says it paid a record $78.4 billion in earnings to the U.S. government last year, reflecting gains from the central bank's unconventional efforts to lift the economy.

The payment to the Treasury Department is the largest since the Fed began operating in 1914. It surpasses the previous record payment of $47.4 billion made in 2009. 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. It is not funded by Congress.