Ron Paul's Audit The Fed Bill On Track To Pass House; Vote Scheduled For Later Today (UPDATE)

H.R. 459 will be debated on the House floor and voted on today.  Because of a technicality, the bill needs a two-thirds majority to pass, so call your representative through the Capitol Hill switchboard at (202) 224-3121 and ask them to vote 'Yes' on H.R. 459.

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Audit The Fed Bill On Track To Pass House

Ryan Grim - HuffPo

WASHINGTON -- An expansive bill to audit the Federal Reserve, sponsored by Rep. Ron Paul (R-Texas), is headed for a vote on the House floor Wednesday. It is one of the few pieces of legislation this session likely to garner bipartisan support.

The bill is being brought up on the suspension calendar, which means it needs two-thirds of the House to approve it, or 292 votes if everyone shows up. The bill has 270 co-sponsors and House GOP sources say every Republican is expected to support it. With enough Democratic support, it should manage to clear the bar. A spokeswoman for Paul said that she was confident the votes would be there, but that approval was still uncertain.

The vote, originally scheduled for Tuesday, was delayed, House Minority Whip Steny Hoyer told reporters, but debate will still take place Tuesday afternoon.

In 2010, Paul and Rep. Alan Grayson (D-Fla.) teamed up to pass legislation to audit the Fed, which became part of the final Wall Street reform bill. Grayson lost his bid for reelection, but is a frontrunner in his Orlando district and is expected to retake his seat next session.

The Fed audit authorized by Dodd-Frank revealed a web of conflicts.

At the height of the financial crisis, the Federal Reserve Bank of Atlanta, for instance, made six major loans to SunTrust Banks, totaling at least $7.5 billion.  James M. Wells, the Chairman and CEO of SunTrust, sits on the Board of Directors at the same Atlanta Fed that lent his company the money.

SunTrust also received $4.85 billion in bailout funds from TARP, a separate program run by the Treasury, on November 14 and December 31 of 2008.

JPMorgan Chase's chief Jamie Dimon, meanwhile, holds a seat on the New York Fed, which Massachusetts Senate candidate Elizabeth Warren and Tim Geithner have called on him to give up in the interest of good governance.

Paul said 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," he said in a Q&A on his congressional site.

At a recent House hearing, Fed Chairman Ben Bernanke was asked about Paul's bill.  He told the Financial Services Committee:

I agree absolutely with Dr. Paul that the Federal Reserve needs to be transparent and it needs to be accountable.  I would argue that at this point, we are quite transparent and accountable on monetary policy. Besides our statement, besides our testimonies, we issue minutes after three weeks. We have quarterly projections, I give a press conference four times a year, there's quite a bit of information provided to help Congress evaluate monetary policy as well as the public.

Also very importantly, the Federal Reserve's balance sheet, its finances, its operations are thoroughly vetted. We produce an annual financial statement, which is audited by an independent external accounting firm. We provide quarterly updates and a weekly balance sheet. We have an independent I.G. We have additional scrutiny imposed by the Dodd-Frank Act.

And very importantly, and this is, I think, the crux of the matter, the general -- the Government Accountability Office, the GAO -- has extensive authority, broad authority to audit essentially all aspects of the Federal Reserve, and the Federal Reserve accepts that and is cooperative with the GAO's efforts.

There is, however, one important exception to what the GAO is allowed to audit under current law and that specifically is monetary policy deliberations and decisions. So what the Audit the Fed bill would do would be to eliminate the exemption for monetary policy deliberations and decisions from the GAO audit. So, in effect, what it would do is allow Congress, for example, to ask the GAO to audit a decision taken by the Fed about interest rates, for example.

Now 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.

So, again, I want to agree with the -- the basic premise that the Federal Reserve should be thoroughly transparent, thoroughly accountable. I will work with everyone here to make sure that that's the case. But I do feel it's a mistake to eliminate the exemption from monetary policy and deliberations, which would effectively, at least to some extent, create a political influence or a political dampening effect on the Federal Reserve's policy decisions.

Comments

[DailyBail]

Here's an example of what the Fed was doing that no one was aware of at the time:

http://dailybail.com/home/bernankes-disclosure-bombshell-the-fed-took-equities-as-coll.html

Whalen:

Perhaps more important is the fact that there is now confirmation that the Fed took in equities as collateral during the market liquidity operations in 2008 and 2009. As one of our favorite equity market observers wrote last week, the fact of the Fed financing equity positions was known in September of 2008, but as my colleague noted at the time, “you had to read between the lines.”

As it turns out, the Fed’s primary dealer credit facility or “PDCF” was essentially able to take any paper, debt or equity, proving once and for all that the Fed had abandoned any pretense at market discipline. For 25 pips over Fed funds, you could finance any equity security: “Eligible collateral will include all collateral eligible in tri-party repurchase arrangements with the major clearing banks as of September12, 2008,” said the Fed in a press release.

Previously I had heard from a number of large bulge bracket firms that there was no problem financing anything with the Fed during the crisis: office furniture, equities, whatever. So now this latest data dump from Chairman Bernanke seems to confirm that eye-opening fact and more, namely that during the crisis dealers were using the Fed to finance equity positions as well as Treasury bonds and mortgage-backed securities.

[DailyBail]

Fed President Richard Fisher: Even We Can't Print Enough Money "To Compete With The Enormous Flood Of Borrowing Coming From The United States Treasury"

http://dailybail.com/home/fed-president-richard-fisher-even-we-cant-print-enough-money.html

Flashback to 2010...

[DailyBail]

How the states rate

A report on state voter systems evaluates each state on five criteria: 1) paper ballots or a paper record of electronic votes; 2) paper backup for electronic return of overseas ballots; 3) contingency plans at polling places if machines fail; 4) reconciliation of voter lists with vote/ballot totals; and 5) post-election audit of vote tallies.

http://www.usatoday.com/news/politics/story/2012-07-24/states-online-voting/56467106/1

[LiberatedCitizen]

Think it really has a chance look at the RATS position

Democrats warn Rep. Paul's 'audit the Fed' bill will politicize monetary policy

http://thehill.com/blogs/floor-action/house/239821-dems-warn-pauls-audit-the-fed-bill-will-politicize-monetary-policy