Sen. Rand Paul hit the campaign trail this week promoting the latest version of his Audit the Fed bill, first pioneered by his father, former Congressman Ron Paul. The Pauls are longtime critics of the Federal Reserve, sounding the alarm that the semi-private bank artificially regulates interest rates and, according to Sen. Paul, exacerbates income inequality.
In an exclusive interview with Rare, Paul said he plans to make a floor speech just prior to his bill’s vote, scheduled for Tuesday at around 2 ET.
“The Fed makes income inequality worse by doling out money to the large commercial banks first, who get to use it before the money depreciates as it trickles out to the rest of us,” said Paul Monday, explaining why this bill is so important.
“There’s a lot of evidence income inequality has gotten worse because of the loss of purchasing power,” Paul noted. “Over the last fifteen years, we’ve lost about 10 percent of real household income, and prices have gone up,” added Paul, explaining that the cost of basic goods such as eggs and white bread have increased dramatically.
Paul said that he expects the vast majority of his Republican colleagues to support Audit the Fed, with some help from a minority of Democrats.
He observed that in the past, a version of this bill passed the House with the unanimous support of Republicans and 100 Democrats. Paul praised that outcome as a “truly bipartisan effort.”
We asked Paul why he believes that only some of his Democratic colleagues are on board with Audit the Fed, particularly when they speak so frequently about the perils of income inequality.
“It’s been disappointing, because people like Bernie Sanders and Elizabeth Warren, who rail against big banks, they have been more so protectors of the biggest bank in our country, which is the Federal Reserve,” said Paul.
“I’d hoped to get more support from Sanders and Warren,” said Paul. “It’s disappointing that they talk a good game, but when push comes to shove, they’re not willing to have increased regulation on the biggest bank in our country,” he added.
Pressed as to why progressives such as Sanders and Warren hold what seems to be a contradictory position on the Fed, Paul said he wasn’t sure, but suspects it might be partisan loyalty or a commitment to targeting only fully private banks.
“All of the Federal Reserve governors were appointed by President Obama,” Paul noted, adding that progressives could be acting as “apologists for a Democrat president.” But perhaps, as Paul said, it’s simply an ideological double standard.
“They want to rail against private banks but not against a public bank, even though the Fed is quasi public. It’s part private, part public, yet they don’t seem to have any criticism for it.”
Sen. Paul has spent the weeks leading up to this vote making the argument as to why the Federal Reserve ought to be audited, highlighting the economic anxiety felt by essentially all Americans who aren’t super wealthy.
Paul told Rare, “The top 1 percent have gone up greatly and the middle class is squeezed by the lack of purchasing power in their dollar, but also by their lack of ability to make interest on their savings.”
If Audit the Fed passes the Senate, it will need to go through the House before it gets to President Obama’s desk. Rep. Thomas Massie introduced legislation last year as a complement to the bill Paul is currently pushing in the Senate.
Whether the House will take up Audit the Fed immediately is not yet clear, but will likely depend on the results of this week’s vote.
UPDATE: Senior CNN political reporter Manu Raju reported after this piece’s original publication that Bernie Sanders intends to vote for Rand Paul’s Audit the Fed Bill. Sen. Paul did not seem to be aware of this at the time of our interview. Sanders has previously gutted attempts to bring about an audit of the Federal Reserve and was criticized by former Rep. Ron Paul for doing so.