Last week the House of
Representatives overwhelmingly passed my legislation calling for a full and
effective audit of the Federal Reserve. Well over 300 of my Congressional
colleagues supported the bill, each casting a landmark vote that marks the
culmination of decades of work. We have taken a big step toward bringing
transparency to the most destructive financial institution in the world.
But in many ways our work is
only beginning. Despite the Senate Majority Leader's past
support for similar legislation, no vote has been scheduled on my bill
this year in the Senate. And only 29 Senators
have cosponsored Senator Rand Paul's version of my bill in the other body. If
your Senator is not listed at the link above, please contact them and ask for
their support. We need to push Senate leadership to hold a vote this year.
Understand that last week's
historic vote never would have taken place without the efforts of millions of
Americans like you, ordinary citizens concerned about liberty and the
integrity of our currency. Political elites respond to political pressure,
pure and simple. They follow rather than lead. If all 100 Senators feel
enough grassroots pressure, they will respond and force Senate leadership to
hold what will be a very popular vote.
In fact, "Audit the
Fed" is so popular that 75% of all Americans support it according to
this Rasmussen
poll. We are making progress.
Of course Fed apologists--
including Mr. Bernanke-- frequently insist that the Fed already is audited.
But this is true only in the sense that it produces annual financial
statements. It provides the public with its balance sheet as a fait accompli:
we see only the net results of its financial transactions from the previous
fiscal year in broad categories, and only after the fact.
We're also told that the
Dodd-Frank bill passed in 2010 mandates an audit. But it provides for only a
limited audit of certain Fed credit facilities surrounding the crisis period
of 2008. It is backward looking, which frankly is of limited benefit.
The Fed also claims it wants
to be "independent" from Congress so that politics don't interfere
with monetary policy. This is absurd for two reasons.
First, the Fed already is
inherently and unavoidably political. It made a political decision when it
chose not to rescue Lehman Brothers in 2008, just as it made a political
decision to provide liquidity for AIG in the same time period. These are just
two obvious examples. Also Fed member banks and the Treasury Department are
full of former-- and future-- Goldman Sachs officials. Are we really to
believe that the interests of Goldman Sachs have absolutely no effect on Fed
decisions? Clearly it's naïve to think the Fed somehow is above political or
financial influence.
Second, it's important to
remember that Congress created the Fed by statute. Congress therefore has the
full, inherent authority to regulate the Fed in any way-- up to and including
abolishing it altogether.
My bill provides for an
ongoing, thorough audit of what the Fed really does in secret, which is make
decisions about the money supply, interest rates, and bailouts of favored
banks, financial firms, and companies. In other words, I want the Government
Accountability Office to examine the Fed's actual monetary policy operations
and make them public.
It is precisely this
information that must be made public because it so profoundly affects
everyone who holds, saves, or uses US dollars.
