Audit the Fed Attached as Amendment

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". . .blanket restrictions on GAO audits of the Fed that have existed since 1978 will be removed."

I was pleased last week when we won a vote in the Financial Services Committee to include language from the Audit the Fed bill HR1207 in the upcoming financial regulatory reform bill. As it stands now, if HR 3996 passes, because of this action, the Federal Reserve's entire balance sheet will be opened up to a GAO audit. We will at last have a chance to find out what happened to the trillions of dollars the Fed has been giving out.

Finally, the blanket restrictions on GAO audits of the Fed that have existed since 1978 will be removed. All items on the Fed's balance sheet will be auditable, including all credit facilities, securities purchase programs and all agreements with foreign central banks. To calm fears that we might be trying to substitute congressional action for Fed mischief in tinkering with monetary policy, we agreed to a 180-day lag time before details of the Fed's market actions are released and included language to state explicitly that nothing in the amendment should be construed as interference in or dictation of monetary policy by Congress or the GAO.

This was a major triumph for transparency and accountability in government. The excuses for not giving out this information are flimsy at best, and the passage of this amendment is a major step to finally getting at the truth.

However, as great as this victory is, we have to remember this amendment is attached to a bill that would give sweeping new powers to the Federal Reserve. The answer is not to increase their powers and ability to interfere in the economy, but that is what the legislation will do. It is a disaster waiting to happen, and unfortunately it looks as if it will pass.

At least with the Audit the Fed amendment attached, the Fed will not be able to do its destructive work in secret. The people will know exactly who the beneficiaries are of this immoral system of money management.

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