End the Fed
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Federal Reserve Open Market Committee Chairman Ben Bernanke is pulling out all the stops to kill Congressman Ron Paul’s legislation to audit the Federal Reserve Bank, this time with a November 29 op-ed column in the Sunday Washington Post.
The Case Against the Fed
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“I am concerned, however, that a number of the legislative proposals being circulated would significantly reduce the capacity of the Federal Reserve to perform its core functions,” Bernanke wrote, adding that "a House committee recently voted to repeal a 1978 provision that was intended to protect monetary policy from short-term political influence.”
Ron Paul’s legislation, H.R. 1207, recently passed the House Financial Services Committee, and a majority of the whole House (307 of 435) have cosponsored the overwhelmingly popular bill. The legislation would require the Government Accountability Office (GAO) to audit the Federal Reserve annually and disclose the results to the public. Bernanke opposes the audit while at the same time claiming that the Fed is adequately audited:
In its making of monetary policy, the Fed is highly transparent, providing detailed minutes of policy meetings and regular testimony before Congress, among other information. Our financial statements are public and audited by an outside accounting firm; we publish our balance sheet weekly; and we provide monthly reports with extensive information on all the temporary lending facilities developed during the crisis. Congress, through the Government Accountability Office, can and does audit all parts of our operations except for the monetary policy deliberations and actions covered by the 1978 exemption. The general repeal of that exemption would serve only to increase the perceived influence of Congress on monetary policy decisions, which would undermine the confidence the public and the markets have in the Fed to act in the long-term economic interest of the nation.
