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Texas lawmaker says transparency of central bank is insufficient and Congress should get a "backbone." But Fed chairman counters that required audit could subject decisions to political influence.
July 18
WASHINGTON — The House of Representatives on Wednesday easily approved Republican Rep. Ron Paul's bill authorizing a broad audit of the Federal Reserve Board.
The bill — long championed by Paul, who is serving his final term in Congress, and fiercely opposed by the central bank — is not expected to pass the Senate.
But it breezed through the House by a 327-98 margin, getting the support of nearly all House Republicans and close to half of the chamber's Democrats.
The vote followed a floor debate Tuesday where supporters called the measure a transparency bill, while its opponents argued that it would compromise the Fed's independence from politics.
Paul, R-Texas, took issue with that reasoning, saying that the Fed is already subject to politics. "It's very political when you have a Federal Reserve can bail out one company and not another company. They're pretty political."
Rep. Barney Frank, D-Mass., who voted against the measure, argued that its supporters are trying to look like they're being tough on the Fed without actually being tough.
"This is a way to shake your fist at the big, bad Fed," he said. "Nobody here thinks that this is ever going to become law."
The bill directs the Government Accountability Office to complete an audit of the Board of Governors and the regional Fed banks followed by a report to Congress.
Wednesday's vote came two years after language included the Dodd-Frank act allowed for an audit of the Fed's crisis-era emergency credit facilities, but stopped short of allowing a full audit.
