Risk Management

House Passes Latest ‘Audit the Fed’ Bill

Republicans in the House of Representatives overwhelmingly supported the measure, but the Senate has no plans to consider a similar bill.
Matthew HellerSeptember 18, 2014
House Passes Latest ‘Audit the Fed’ Bill

The latest legislative effort to audit the Federal Reserve system has passed the House but is likely to meet the same fate as its predecessor by dying in the Senate, Reuters reports.

Federal Reserve headquarters.

Federal Reserve headquarters.

Rep. Paul Broun of Georgia took up the cause originally championed by former Rep. Ron Paul, Republican from Texas, by introducing H.R. 34, which would require the comptroller general to conduct an audit of the Federal Reserve’s board of governors and 12 member banks within one year of enactment and submit a report to Congress on the findings within 90 days of the audit being completed.

The House voted 333-92 in favor of the bill Wednesday with a total of 106 Democrats joining all but one Republican in support. Paul’s son, Sen. Rand Paul (R-Ky.), has introduced companion legislation in the Senate.

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The vote “brings us one step closer towards bringing much-needed transparency to our nation’s monetary policy,” Broun said in a statement. “For the past 100 years, the Federal Reserve, a quasi-government agency, has acted under a veil of secrecy, controlling our monetary policy and thus our economy.”

In 2012, Ron Paul’s similar “Audit the Fed” bill handily passed the House but Sen. Harry Reid,, Nevada Democrat, blocked it in the Senate amid concerns that exposing the Fed’s communications to public scrutiny would politicize the monetary system.

Then-Fed Chair Ben Bernanke told Congress he could envision a “nightmare scenario” where lawmakers would disagree with a Fed decision on interest rates and try to get other agencies, such as the Government Accountability Office, to review it.

His successor, Janet Yellen, is no fan of H.R. 34. , warning in February that it would interfere with “the independence of monetary policy.”

A senior Senate Democratic aide told Reuters there were no plans to consider the bill before the end of the year. “That means an expected death for the House measure, which would require Senate action before the next Congress takes office in January,” Reuters said. “If no action is taken by then, it would need to be reintroduced and submitted for a new vote.”

Source: Reuters U.S. House Passes Fed Audit Bill

Image: Rdsmith4, Wikimedia Commons, CC BY-SA 2.5

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