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Audit The Fed Push Strengthened By Second Front In Senate
Dorgan, Grassley introduce another amendment
for spending transparency
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The push to audit the Federal Reserve was given a fresh injection
yesterday with the introduction
of another bipartisan amendment to the Wall Street
reform bill in the Senate that would force the central bank
to reveal where $2 trillion in public bailout money was spent.
Sens. Chuck Grassley (R-Iowa) and Byron Dorgan (D-N.D.) noted
that the Fed's continued secrecy regarding its emergency lending
programs, even in the face of federal court rulings, had motivated
them to introduce the measure.
"The Fed refuses to disclose this information to the American
people so we are taking Congressional action to determine how
the Fed has used these trillions of dollars," Dorgan said
in a joint press release.
"The Fed has gone beyond was was viewed as its historical
authority in the last two and a half years without any transparency
or accountability," Grassley said. "Our amendment
changes that by making the Fed's emergency loan authority subject
the light of day."
Grassley is already a co-sponsor of the audit the Fed amendment
introduced by Sen. Bernie Sanders (I-Vt.).
Sanders' amendment is due to be voted on imminently. If it
succeeds, following the passage of a similar amendment in the
House late last year sponsored by Congressman Ron Paul, The
Fed may be forced to undergo a thorough audit by Congress' investigative
arm, the Government Accountability Office.
Currently the GAO has no means of reviewing the vast majority
of the Fed's monetary policy deliberations and decisions. The
GAO also cannot examine the Fed's transactions with foreign
governments, foreign central banks and other global financial
organizations.
"How often do you have some of the most progressive members
in Congress — and I include myself within that fold —
working with some of the more conservative members?" Sanders
observed Wednesday.
Earlier
this week it was revealed that the Fed is secretly
engaged in an intense lobbying effort to stave off moves toward
an audit. It is pushing Senators to support an amendment by
Sen. Jeff Merkley (D-Ore.) that would amount to a much more
restrictive audit provision.
In addition to backlash from the Fed and the country's
largest commercial banks, the thorough audit provisions
face
opposition from the White House. Chief of staff
Rahm
Emanuel is reportedly working closely with the Fed
to kill off the audit provisions at all costs to protect the
power structure dominated by the international banking elite.
All three parties contend that an audit would politicize monetary
policy decisions and threaten the independence of the Fed.
Dean Baker, renowned macroeconomist and co-founder of the Center
for Economic and Policy Research explains
why such contentions are weak arguments:
I just don’t see any legitimate meaning of that term,
independence, that it interferes with. We want them to make
what they think are the best calls. But after the fact, do
they have to answer for it? Should they have to say that these
are the calls we made, this is why we made them? Absolutely.
I don’t understand how that isn’t independent.
So those are the two arguments, on the one hand the stigma
that will be created if at some point it’s known that
banks go to the Fed, and on the other hand, that it somehow
harms their independence. I mean, the FDA has to give a full
account, we reviewed this drug, we reviewed that drug, this
is why we approved this drug, here’s why we didn’t.
I don’t understand why the fed should operate differently.
If the audit the Fed provisions survive, it may leave Obama
no choice but to veto the entire financial reform bill.
The administration wants to see the creation of a large "independent"
bureau within the Federal Reserve to police lending and other
customer financial service transactions.
"It creates one of the most important, one of the most
powerful, all-powerful individuals in the entire federal government,"
Sen.
Roger Wicker, R-Miss., has commented, objecting
to the autonomy the Democratic leadership would give the head
of the bureau.
A veto on auditing the Fed would prove a very unpopular move,
which is why the White House wants it killed off in the Senate.
A Wall
Street Journal poll illustrates the overwhelming
support for auditing the Fed, with almost 90% saying a measure
allowing Congress to audit the Fed should be passed.
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