House votes to audit the Federal Reserve

If one cannot “end the Fed,” one can instead go for what is perhaps the next best thing and legislatively instigate an independent audit to examine the Federal Reserve’s many questionable financial decisions since the 2008 financial crisis — and Ron Paul just did.

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“Since the 2008 financial crisis, the Fed has tripled its balance sheet to $3 trillion, equivalent to 20% of the economy, through an unprecedented series of bailouts and economic interventions,” said House Oversight and Government Reform Committee chairman Darrell Issa, R-Calif., who shepherded the bill through his committee. “The public has a right to understand how and under what terms decisions were made and who is responsible.”

The legislation tasks the Government Accountability Office (GAO) with auditing the Federal Reserve and reporting back within a year. The 327-98 vote amounts to a personal victory for Rep. Ron Paul, R-Texas, who has called for such an audit for years.

Chairman Ben Bernanke has long been opposed to such an audit, since it would interfere with his decision-making process (some people just don’t like checks and balances, yo), but Rep. Paul took him to task on the transparency score during a Financial Services Committee hearing last week. Righteous:

While the audit passed the House with flying colors (hey, check out that bipartisan support — Congress can get things done, guys!), Mr. Paul expressed some skepticism that the similar legislation introduced by his son Sen. Rand Paul will make it through the Senate and to President Obama’s desk: “The Senate will give us trouble,” he said on C-SPAN yesterday. And while that may be true for the time being, it sounds like something the other chamber’s Democrats haven’t been opposed to in the past:

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The overwhelming 327-98 vote sends the bill to the Senate where Majority Leader Harry Reid, Nevada Democrat, has previously expressed support for an audit — though it’s unclear he’ll carve out time for the legislation this year.

Regardless, with such overwhelming bipartisan support, the initiative is on Congress’s radar, and with all of the money and clutch decision-making that goes through the Fed’s unchecked authority every day, I think Rep. Paul was right to be so insistent about it. The longtime Congressman has decided not to seek another term and will retire at the end of this session, and I say he can go ahead and count this as a feather in the cap of his career.

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