On a bipartisan vote of 327-98, Rep. Ron Paul???s ???Audit the Fed??? bill, more properly known as the Federal Reserve Transparency Act, passed the House on Wednesday. Whatever its ultimate fate in the Senate, let us pause to spend a moment praying for the sanity of the brave team of accountants that would be tasked with performing such an audit.
???I know when people talk about independence and having this privacy of the central bank, it means they want secrecy, and secrecy is not good,??? the Associated Press quotes Paul as saying. Critics of his bill maintain that such secrecy is essential for insulating the Federal Reserve from political pressure.
Those who want an audit wonder when the rest of us will get some insulation from the Fed. Paul has long maintained that the Federal Reserve is ???the most important enabler of government profligacy,??? and found it unacceptable that such an immense financial resource is walled off from the Congressional keepers of the national purse.
As for the threat of political interference in the Fed, Paul asked on Tuesday, ???Well, how can it be more political if the Treasury Department from the executive branch gets together with the Federal Reserve and bails out their friends? And then they want it kept secret. And they say it would be chaotic. Yea, it would be chaotic for those people who have been ripping us off. That's why they don't want to have it. They talk about, 'I want transparency.' And they talk about independence. Independence to them means secrecy.???
A limited audit of Federal Reserve emergency loan programs, released last year, supported Paul???s concerns. ???The Federal Reserve Banks awarded 103 contracts worth $659.4 million during the period prescribed by the report,??? according to the Washington Times. ???About two-thirds of the contracts were awarded noncompetitively - including eight of the 10 highest-value contracts - due to ???exigent circumstances,??? such as the time-sensitive nature of the emergency programs.??? Significant questions about conflicts of interest were raised.
Congressman Paul???s son, Senator Rand Paul (R-KY), was quick to call for a vote in his house of Congress. ???An audit of the Federal Reserve is more urgent than ever. A GAO report from July 2011 revealed the Fed bailed out banks and corporations to the tune of $16 trillion in taxpayer dollars,??? Senator Paul said in a statement. ???A full and thorough audit will finally bring transparency and accountability to the secretive institution that devalues Americans??? savings, drives inflation, and enables big government. I applaud its passage in the House today. I also congratulate my father, Rep. Ron Paul, who has long fought at the vanguard of this movement when he first introduced Audit the Fed in 1983. Now with 271 co-sponsors and having passed the House, I call upon Democrat leadership to allow a vote in the Senate on this much-needed transparency bill.???
Rand Paul long ago introduced a companion bill in the Senate, which was co-sponsored by Senator Jim DeMint (R-SC). Upon passage of the House bill, Senator DeMint remarked, ???At the same time that the Federal Reserve has played an unprecedented role in our economy, it has also shown an unprecedented resistance to transparency. The Fed should no longer be allowed to conceal the full story on the depth of its interventions surrounding the financial crisis, on how it formulates the easy money policy that is damaging to our economy, and on the deliberations it???s making over implementing many of the hundreds of regulations required by the sweeping Dodd-Frank law. The only way to achieve these goals is a full audit of the Federal Reserve, and I applaud the House of Representatives for approving legislation that would do just that.???
The odds of survival for the Federal Reserve Transparency Act in the Senate are poor, but whatever transpires, Ron Paul has been able to cap off a long career with a successful bipartisan vote on his signature issue. There is little doubt that far more people agree with him about auditing the Fed than when he began his quest. That???s quite an achievement. Now we'll learn if the Senate is ready to summon Hercules, hand him a broom, and tell him he's got some stables to clean out.