Bernanke Slams Audit the Fed

Reports Reuters:

Federal Reserve Chairman Ben Bernanke on Wednesday rebutted Republican lawmakers pushing a bill that would give Congress the ability to review monetary policy decisions, saying it could compromise central bank independence.

Bernanke said it would be a “nightmare scenario” if politicians decided to second-guess monetary policy.

“That is very concerning because there’s a lot of evidence that an independent central bank that makes decisions based strictly on economic considerations and not based on political pressure will deliver lower inflation and better economic results in the longer term,” Bernanke told the U.S. House of Representatives’ Financial Services Committee.

The hearing was the likely last chance for retiring Texas Representative Ron Paul, known for proposing the Fed should be abolished, to grill the central bank chairman.

“Trillions and trillions of dollars (are) being printed out of thin air,” said Paul.

The Republican-controlled House is on track to take up Paul’s Fed audit legislation next week. The bill, which has been co-sponsored by more than half of all House members, looks set to clear that chamber…

Paul’s bill would direct the Government Accountability Office, an independent, nonpartisan congressional agency, to conduct a Fed review, and it would remove an exemption monetary policy has enjoyed.

Bernanke said the very notion of a monetary policy audit was misleading.

The funniest part of this story:

“The term ‘audit the Fed’ is deceptive. The public thinks that auditing means checking the books, looking at the financial statements, making sure that you’re not doing special deals, and that kind of thing. All of those things are (already) completely open,” (Bernanke) said.

Completely open? Yeah right!

Source: Paulitical Ticker with Jack Hunter

Notable Audit the Fed Details

Reason’s Brian Doherty outlines some important provision details in Ron Paul’s Audit the Fed bill which passed House committee last week:

This morning, the U.S. House of Representatives Oversight and Government Reform Committee unanimously passed Ron Paul’s latest “Audit the Fed” bill, H.R. 459.

The bill would eliminate certain restrictions that now exist on any audits done on the Federal Reserve from 31 U.S.C. 714, such as:

    Audits of the Board and Federal reserve banks may not include—

    (1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;

    (2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;

    (3) transactions made under the direction of the Federal Open Market Committee; or

    (4) a part of a discussion or communication among or between members of the Board and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection.

Again, the above are the existing restrictions that H.R. 459, if it eventually passes the full House and then becomes law in unaltered or unamended form, will eliminate from Fed audits.

Source: Paulitical Ticker with Jack Hunter

Rand Thinks Ron’s Audit the Fed Will Pass House

And is hopeful for a Senate vote. Reports Newsmax:

Kentucky Sen. Rand Paul tells Newsmax.TV that “the Federal Reserve needs oversight” and expects a full vote in the U.S. House of Representatives on legislation that would grant congressional oversight of the independent central bank.

“We need to have checks and balances,” the first-term Republican told Newsmax. “They are an agency that, basically, has destroyed 96 percent of the value of our currency over the last 100 years or so.

“We need to do something to have congressional oversight over what they do.”

On Wednesday, the House Oversight and Government Reform Committee voted unanimously to authorize an investigation of the Fed to make it more accountable to lawmakers.

The measure was sponsored by Texas Republican Rep. Ron Paul, a longtime Fed critic — and Rand’s father.

Sen. Paul introduced similar legislation in January 2011.

“I think it will pass the full House,” Rand Paul said of measure’s future prospects. He’s hoping for a vote this summer.

“There are many who don’t want to have a vote because they fear that a vote will pass. … We just have to get a vote.”

In the Senate, Paul said he’s “doing everything I can possibly do to get a vote. But over in the Senate, it’s just like pulling teeth just to get a vote on anything.

“I think there’s some chance I can get a vote in the Senate…”

Source: Paulitical Ticker with Jack Hunter