At one time, the push to audit the Fed was limited to the fringe of both the Left and the Right.  Yesterday, the idea officially became mainstream, with the Senate voting unanimously for an audit of the Federal Reserve.  Along the way, though, the proposal got narrowed — so much so that the movement’s unofficial sponsor suggests that the word “audit” is a bit of a misnomer:

The Fed amendment was submitted by Sen. Bernard Sanders (I-Vt.) and co-sponsored by colleagues on both sides of the aisle. It gives the Government Accountability Office expanded power to audit the Fed and requires the central bank to disclose details about firms that received emergency aid during the financial crisis.

“We are beginning to lift the veil of secrecy on what is perhaps the most important agency in the United States,” Sanders said.

Facing pressure from the Obama administration and fellow lawmakers, Sanders agreed last week to narrow his initial proposal, which would have required the Fed to submit to regular audits.

Instead, under the legislation, the Fed must undergo a one-time examination of its massive emergency lending programs and post details on its Web site by December about the firms that benefited from its lending during the crisis. The new language, however, prevents investigators from peering into the central bank’s deliberations on interest rates and other elements of monetary policy. …

Paul expressed disappointment with the Sanders amendment, writing on his Web site that “while it is better than no audit at all, it guts the spirit of a truly meaningful audit of the most crucial transactions of the Fed. In fact, rather than still calling the Sanders Amendment an audit, maybe it should instead be called more of a disclosure at this point.”

For Paul and Sanders, the original point was to shed light on the Fed’s manipulation of monetary policy, not just to examine its books.  The audit, or what Paul more accurately calls a disclosure, will give lawmakers its first peek into the machinations conducted by the Fed in the collapse and stabilization of the financial markets over the past two years.  The Fed itself didn’t object to this version of the bill, which should give an indication that they expect nothing to come to light that will embarrass the institution.  The Senate’s unanimous support shows how politically safe going this far and no farther has become.

This will almost certainly leave the people who most wanted an audit — and a commitment to audits on a regular basis — unsatisfied.  Many (although not all) audit advocates prescribe to a theory that the Fed operates within or heads a conspiracy to manipulate wealth and power in arbitrary, secret, and vaguely evil ways.  Exempting its monetary policy deliberations from disclosure will do nothing to address those fears, or for the Fed to put them to rest.

That won’t be the only disappointment in this bill, either.  An amendment to start disconnecting Fannie Mae and Freddie Mac from the government failed, mostly along party lines, 43-56.  Filed by Judd Gregg, John McCain, and Richard Shelby, the amendment would have mandated an end to government support of the failed GSEs within two years.  Taxpayers have already poured $145 billion into the lending guarantors, who issued a combined request of $21 billion in more aid over the past two weeks.

Why did it fail?  It’s become clear that Democrats don’t want to disconnect Fannie and Freddie from government control, or even plan for it.  They want to have them on hand for their next manipulation of the lending markets in service to their ideas of social engineering — which was the underlying cause of the financial collapse in 2008.  That’s a much bigger problem than anything the Fed is doing, audit or no audit.