Will Paul’s bill to audit “high exalted priesthood” Federal Reserve pass today?
July 25, 2012
Wednesday the 25th of July is the day that libertarian Congressman Ron Paul’s political legacy will be written, as the House votes on his bill to audit the Federal Reserve.
In order to pass, the Federal Reserve Transparency Act, H.R. 459, needs two-thirds of the House to vote in favor. That equates to around 292 votes.
Last month, a bipartisan vote in the House Oversight Committee was almost completely unanimous in approving the bill, advancing it to the House floor.
The bill has 270 co-sponsors, including nearly four dozen Democrats, and insiders believe that every Republican representative will support the legislation, meaning that barring some major flip flopping, the bill will be successfully passed.
If it is successful, the bill would require the Government Accountability Office (GAO) to conduct a top to bottom audit of the Fed’s board of governors and 12 regional banks, and reveal details of its private monetary policy deliberations.
While House Minority Whip Steny Hoyer is leading a Democratic charge against the bill, claiming that it will overly politicize the Fed’s monetary policy and “jeopardize the Fed’s independence”.
Speaking in favor of the bill and addressing this very point, however, Ohio Democratic Rep. Dennis Kucinich urged that the Fed is already “political” in the decisions it makes.
“We have unemployment because of politics. We have people losing their homes because of politics. We have banks getting uncalculated amounts of money from the Federal Reserve and we don’t even know about it. Meanwhile people can’t get a loan to keep their home or keep their business.” Kucinich stated in an impassioned speech.
“Let’s look at some recent history here.” the Congressman continued.
“2008: subprime meltdown, collateralized debt obligation, go back for mortgage-backed securities, neighborhoods in Cleveland melting down, people losing their homes. The Fed looked the other way and we’re saying, ‘oh, don’t go into the Fed, it would be political.’ Yes, it’s political.”
“This is all about disclosure and accountability. You know, the Fed’s not some kind of hocus pocus, black box operation. The Fed essentially supplants the constitutional mandate in Article 1, Section 8, that belongs to the Congress of the United States,” Kucinich added.
“It’s time that Congress stood for its constitutional role: Article 1, Section 8, the power to coin or create money. It’s time we stood up for America’s 99 percent,” said Kucinich. “It’s time that we stood up to the Federal Reserve that right now acts like it’s some kind of high exalted priesthood, unaccountable in a democracy.”
Watch the video:
Ron Paul himself addressed his bill in an appearance yesterday on CSpan:
Ron Paul has made an audit of the Fed a long term goal during his time in Congress.
After introducing his original audit the Fed bill in 2009, a watered down version was added to the Dodd-Frank financial reform law signed into law last year. However, much of Paul’s bill had been stripped away, and even the Congressman himself voted against the final bill.
However, the bill did allow for a rare one off audit of the Federal Reserve’s crisis-response emergency lending programs of 2008. In October of last year, in his role as chairman of the Domestic Monetary Policy subcommittee, Paul relished the glimmer of transparency and led the hearing into the GAO’s audit.
“More people now are starting to realize that the Fed isn’t independent of political independence because indirectly and some times more directly it is involved in political decisions or at least private decisions to serve some political interest.” Paul noted during the hearing last year.
Along with Paul, Republicans in attendance argued that the audit should pave the way for regular reviews of the Fed’s policies, as well as more complete disclosure of exactly who has received upwards of $27 trillion in bail out funds since 2008.
“Would it be much of a problem if we were doing this every year?” Paul asked.
Although the one time GAO audit was extremely limited in its scope, the report found several instances of conflicts of interest and questionable practices involving Fed officials. It was also revealed that the Fed made $16.1 trillion in secret loans to Wall Street firms at the height of the crisis.
The full audit the Fed bill would repeal specific limitations that were applicable to the previous one off audit of the Fed. Currently, any 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.
In a Q&A on his congressional site Paul comments that the new audit bill is needed because the 2010 language didn’t go far enough. “The audit mandated in the Dodd-Frank Act focused solely on emergency credit programs, and only on procedural issues (such as the effectiveness of collateral policies, whether credit programs favored specific participants, or the use of third-party contractors) rather than focusing on the substantive details of the lending transactions. H.R. 459 does not limit the focus of the audit,” Paul notes.
In order for the legislation to be signed into law, it will have to pass both Chambers of Congress. The Senate version of the bill, introduced by Paul’s son Rand (R-KY), has yet to be marked-up for debate.
Steve Watson is the London based writer and editor for Alex Jones’ Infowars.com, and Prisonplanet.com. He has a Masters Degree in International Relations from the School of Politics at The University of Nottingham in England.