United Liberty

Watered-down legislation was introduced yesterday that could undermine the momentum gained by the movement to Audit the Federal Reserve:

Proponents of auditing the Federal Reserve have a new bill to support their cause. Sen. Jeff Merkley (D., Ore.) and Sen. Bob Corker (R., Tenn.) introduced legislation today to require the Government Accountability Office to audit several of the central bank’s emergency lending programs that were created during the financial crisis.

The two junior senators are joining a movement that has drawn more than two-thirds of the House and a third of the Senate. But their legislation, the Federal Reserve Accountability Act, is intended to sidestep criticism that auditing the central bank would hinder the Fed’s independence in conducting monetary policy. The bill directs the GAO — the investigative arm of Congress — to audit emergency lending programs that aren’t already subject to government audits.
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To avoid disrupting markets, the legislation directs the GAO to redact from its reports the names of specific institutions using the programs and “identifying details regarding assets or collateral” held in the audited facilities. But that information would be released one year after each program is no longer used. The legislation specifically cites programs created under the Fed’s 13.3 authority, which allows central bank lending to any firm in “unusual and exigent” circumstances: the money market investor funding facility, the asset-backed commercial paper money market mutual fund liquidity facility, the term asset-backed securities loan facility, the primary dealer credit facility and the commercial paper funding facility.

Senators sponsoring the legislation say it strikes a balance for taxpayers and the independence of the Fed. Rep. Ron Paul’s Campaign for Liberty says call it an “unacceptable compromise”:

Today, Senators Jeff Merkley (D-OR) and Bob Corker (R-TN) introduced the Federal Reserve Accountability Act, an attempted compromise on the issue of transparency for America’s secretive central bank.  The bill would permit an audit of the Fed’s actions in the Troubled Asset Relief Program (TARP) and similar high profile bailouts, but would not allow Congress to review the Fed’s inflation of the money supply or the its agreements with foreign central banks.

Legislation that would bring a full audit of the Fed, Congressman Ron Paul’s H.R. 1207 and its Senate companion S. 604, has gained strong grassroots support and built tremendous pressure on banking special interests.
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“Claims that transparency at the Federal Reserve would leave Congress in charge of monetary policy are simply bogus,” said Jesse Benton, Senior Vice President of Campaign for Liberty. “There is absolutely no reason why The American People should not be able to review the minutes of the Federal Open Market Committee after a reasonable amount of time has passed.”

“The Federal Reserve Accountability Act does not audit the monetary policy functions which have been responsible for our deteriorating dollar and so many of our current economic problems, and it is not an acceptable piece of legislation. Campaign for Liberty will continue to push for a full audit of the Fed.”

Rep. Paul’s legislation would open up certain information to the Government Accountability Office currently excluded from audits in subsection (b) of 31 USC 714 (including transactions with foreign central banks, decisions on monetary policy, transactions made via the Federal Open Market Committee and communications by members of the Fed’s Board of Governors).

HR 1207, Paul’s bill, is more through and shines more light on the process. Any other bill is a slap to the face of taxpayers.