HR 1207 Dies, Yet "Audit the Fed" Lives On

It’s another sunny day of Indian summer here in Baltimore… here’s some fitting news: The “audit the Fed” bill is alive and kicking.

As we reported earlier this month, Ron Paul’s popular proposal of HR 1207 was gutted by Mel Watt, a congressman firmly tucked in the pocket of the American banking industry. In typical political form, Paul and Congressman Alan Grayson took the language of the original “audit the Fed” bill, turned it into an amendment of a different bill about to come to vote and managed to get the thing approved yesterday by the House Financial Services Committee. Heh… not even an honest bill can get through without some sneaky politics.

Should it be passed by the full House and Senate, Paul’s people say the amendment:

  • “Removes the blanket restrictions on GAO audits of the Fed
  • Allows audit of every item on the Fed’s balance sheet, all credit facilities, all securities purchase programs, etc.
  • Retains limited audit exemption on unreleased transcripts and minutes
  • Sets 180-day time lag before details of Fed’s market actions may be released
  • States that nothing in the amendment shall be construed as interference in or dictation of monetary policy by Congress or the GAO.”


But just like Indian summer, in the back of our minds, we fear some dark, cold days might be around the corner. The new Paul/Grayson amendment is attached to Barney Frank’s HR 3996, what he calls the “Financial Stability Improvement Act of 2009.” That’s the “too big to fail” legislation we mentioned last month that would, among other things, allocate $200 billion to help the government to seize companies they feel have too much systemic risk.

And even if Paul’s amendment still becomes law — and if the evils in Barney Frank’s bill don’t manage to completely negate it — there’s no guarantee whatsoever that our government won’t find a way to screw it up. We’re all for lifting the Fed’s veil of secrecy, but as Sen. Jim DeMint put it, “If there’s anything worse than a secret Federal Reserve, it’s Congress controlling it.”