Fed Audit Clears House Hurdle
Proving that perseverance can sometimes be half the battle, Ron Paul’s relentless pursuit for an audit of the Federal Reserve continues to move forward. The House Oversight Committee last week cleared a bill that takes Paul’s quest for an audit of the Fed’s monetary policy decisions one step closer to reality. This from Reuters:
The measure was proposed by Republican Representative Ron Paul, a long-time critic of the central bank, and has 257 co-sponsors, more than half of all House members.
Its approval by the House Oversight Committee clears the way for a vote in the full House. House Majority Leader Eric Cantor said last month the House would vote on the legislation in July.
“The Fed’s balance sheet now stands at nearly $3 trillion. It is long past time for a real audit,” said Oversight Committee Chairman Darrell Issa.
The central bank’s balance sheet has ballooned to about $2.8 trillion from around $800 billion before the 2007-2009 financial crisis as the central bank bought Treasury securities and mortgage-related debt to drive borrowing costs lower and boost economic growth.
Sen. Rand Paul, meanwhile, has introduced similar legislation over in the Senate, where it has gained 20 co-sponsors in the 100-member body.
The legislation directs the Government Accountability Office, an independent, nonpartisan agency that works for Congress, to conduct the review.
The Fed declined comment on the bill on Wednesday. However, in the past, officials of the central bank have said that audits of monetary policy decisions would weaken the institution because markets would assume the central bank could be pressured by politicians.
“The Federal Reserve’s independence from political interference is central to its functioning,” said Representative Elijah Cummings, the committee’s top Democrat who had sought to exempt monetary policy deliberations. “Exercising that independence, during the financial crisis, the Fed has been able to implement monetary policies that have been essential to strengthening and stabilizing our economy,” he said.
Transparency and accountability would weaken the institution? Um, OK, because the opposite has produced such awesome results.
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