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Senator Bernard Sanders (I-VT) first introduced an amendment to Senator Dodd’s Restoring American Financial Stability Act requiring that the Government Accountability Office audit the Federal Reserve on a regular basis. Unfortunately, Sanders succumbed to pressure by the Obama administration by scaling back his original proposal. According to the Washington Post,
The new language prevents investigators from peering into the agency's deliberations on setting interest rates and other elements of monetary policy. Still, the Fed would have to submit to a one-time examination of its massive emergency lending programs and would have to post details on its Web site about firms that benefited from its lending during the crisis.
The amendment is a step in the right direction to increase transparency within the Federal Reserve. However, since it is a limited and one time audit of the Fed it does not guarantee lasting transparency. A letter was released by Ron Paul (R-TX) last night concerning the Sander amendment,
While the Sanders amendment takes important steps toward more transparency, the thorough audit language we fought to pass in the House last year is no longer present.
In addition, Ron Paul explains the need for a stronger audit the fed amendment,
A one-time disclosure now will not do us a lot of good down the road when the cycle repeats itself and friends of the Fed find themselves in trouble again.
Paul is referring to his legislation H.R 1207: Federal Reserve Transparency Act of 2009 which was passed overwhelmingly by the House that would permanently remove the Fed's special audit protections. Fortunately, Senator Vitter (R-LA) has introduced an amendment to Senator Dodd's bill that would guarantee lasting transparency by using the exact language in H.R 1207,
The senator would offer an amendment to the Wall Street overhaul bill that is 'word for word' what Paul secured in the House and that passed there in December.
Paul says that Vitter’s amendment will require,
full disclosure and full accountability going forward.
Both amendments are expected to be voted on today. Please use FreedomWorks' war room to contact your representatives to let your voice be heard on the issue of Federal Reserve transparency.