Federal Reserve

Audit the Fed Bill Passes Committee

Headed to House floor for eventual debate and vote.

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House

The House Oversight Committee passed the Federal Reserve Transparency Act (H.R. 24) sponsored by Rep. Thomas Massie (R-Ky.) yesterday, setting the bill up for an eventual vote on the House floor.

The bill, which was introduced in January 2015, would change the rules under which the Federal Reserve is audited. Current law exempts from audit transactions with foreign central banks and foreign governments, actions surrounding monetary policy matters, transactions made under the direction of the Federal Open Market Committee (the FOMC, which sets interest rates), as well as communication by Federal Reserve board members, officers, and other employees about such exempt transactions and actions.

Massie called the current audits "perfunctory" and "cursory" in a committee debate on the bill, saying lifting the restrictions would allow for a "systematic" audit. The Federal Reserve Transparency Act would also require the Comptroller General of the United States to conduct an audit within a year of the bill's passage and to report on that audit to Congress.

"The Federal Reserve should not keep secrets from Congress," Massie said in a statement. "Ironically, the people who argue against an audit make the case for an audit by saying that transparency may affect the way the Fed operates." Critics of the "audit the Fed" movement insist the current limited audits is enough and that the restrictions H.R. 24 would expose the Federal Reserve to Congressional pressure. "Congress created the Federal Reserve, so it is Congress' responsibility to audit the Federal Reserve.  Americans want and deserve more transparency," Massie said in his statement.

The current restrictions were imposed in the 1970s through the Federal Banking Agency Audit Act, after members of Congress tried to get audits of the Federal Reserve, which the Fed lobbied heavily against. In 1995, the FOMC voted to destroy nearly two decades-worth of its transcripts.

The Senate version of the Federal Reserve Transparency Act was introduced by Sen. Rand Paul (R-Ky.) last November. The Senate voted 53-44 on S. 2232, failing to reach the 60 votes needed for cloture.

A similar bill in the previous congressional session got out of the House Oversight Committee July 2014, and passed the House 333-92 six weeks later (including the four-week summer recess), with all but one Republican (the now ex-Rep. John Campbell of California) voting yes, and Democrats split 106-91 in favor. It died in the Senate. A version of the bill in the Congress before that, also passed by a large, bipartisan margin, as Massie noted in the committee debate.

There's no timeframe on a vote for H.R. 24 by the full House yet.

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21 responses to “Audit the Fed Bill Passes Committee

  1. And then was swept under a basement rug in the darkest corner of the room furthest in the back.

    1. Yeah, pretty much.

  2. Justin Amash really needs to step up his hair game.

    1. Pretty sure that’s Massie.

      1. It’s Massie.

      2. Like I said, Justin Amash needs to step up his hair game. Meaning, compared to his compadres Massie & Paul.

        1. Ahhh, OK. I thought you were busting on the person (Massie) in the picture for having a stupid hair do and got the name wrong.

        2. no mention of mitt? joe smith is gonna smite you.

  3. Audit the Fed Bill Passes Committee…And Is Then Instantly Vaporized.

    Sorry guys, they gutted the STOCK Act and you think this will go anywhere? Laughable.

    1. “they gutted the STOCK Act”

      How so?

  4. “Critics of the “audit the Fed” movement insist the current limited audits is enough and that the restrictions H.R. 24 would expose the Federal Reserve to Congressional pressure.”

    Yeah because we know that currently the Fed Chairman and/or the FOMC never take any political considerations into account in any way whatsoever when making monetary policy decisions.

  5. The Senate version of the Federal Reserve Transparency Act was introduced by Sen. Rand Paul (R-Ky.) last November. The Senate voted 53-44 on S. 2232, failing to reach the 60 votes needed for cloture.

    So, if the Senate bill has already failed, then if the House bill passes it’ll already DOA since the Senate version has already died, correct? Or would the Senate then take up the House bill and vote on it? I’m trying to remember the procedure here. I guess I need to go home and binge watch some School House Rock or something.

    1. I think, as a parliamentary move, somebody might move to hold the Senate bill for reconsideration after the floor vote. If the House bill has (or is amended on the floor of the House to have) provisions more to some Senators liking, a Senator could move to have the old bill brought back, amended to strike its language and replace with the House bill, and then get a vote that way.

      However, will Obama sign such a bill or let it become law? I have my doubts.

      1. might have moved. And I used to be a proofreader.

  6. Weed is reportedly the biggest cash crop in KY. They have also elected Massie and Paul. Perhaps the Free State Project picked the wrong state.

    1. They did, and as much as I would have liked the correct state to be KY, the correct answer was Wyoming.

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