Despite overwhelming support from the American people for action, and a grassroots push that has led to multiple victories in the U.S. House of Representatives, the Senate has so far failed to follow the lead of our colleagues across the Capitol to Audit the Fed.
So the Federal Reserve continues to largely dictate the terms of its own transparency, the Government Accountability Office’s (GAO) hands remain tied from conducting a thorough audit, and you pay the price through devalued savings, higher costs, and devastating economic crashes ushered in by market manipulation.
I plan to give Congress another chance to set things right with my Audit the Fed amendment this week.
Audit the Fed is only a few, short pages of making government work for the American people again.
My legislation authorizes the first-ever full audit of the entire Federal Reserve System in its nearly 105-year history, including its agreements with foreign governments and central banks, discount window and open market operations, member bank reserves, and Federal Open Market Committee (FOMC) directives.
Audit the Fed would require the GAO to conduct this complete audit within one year of the bill’s passage and report back to Congress within 90 days of finishing the review.
I ran for Senate to fight Washington’s desire to throw billions of dollars at anything that moves, yet for all the disregard Congress has shown in accumulating a $20 trillion-plus national debt, we can still debate its habits in front of the American people.
Meanwhile, the Fed can create new money to spend on whatever financial assets it wants, whenever it wants, while giving the new money to whichever banks it wants – with the Fed’s interest rate manipulation acting as a hidden tax on the less well-to-do.
That’s why I was disappointed to see Audit the Fed blocked on a procedural vote in 2016 by a majority of Democrats, who otherwise love to paint Republicans as being against the little guy yet voted to keep the biggest, most well-connected bank of them all free from this common-sense reform.
I hope they will take this new opportunity to stand up for the American people, who, despite the Fed’s mandate to keep prices stable, have had to stretch their dollars to provide for their families and meet basic needs. The Minneapolis Federal Reserve Bank’s website hosts a calculator that reveals that the amount of goods and services $1 would have gotten you in 1913, the year Congress created the Fed, would now require almost $25.
When you hear the usual talking points about Fed “independence,” remember that key idea – the Fed is a creation of Congress, making it subject to the legislative branch’s oversight. No matter how many times the Fed has predicted doom and gloom for being forced to increase its transparency, the world and the financial sector have continued on.
After the GAO made seven recommendations to improve the Fed’s operations following Congress authorizing a one-time audit of the Fed’s emergency lending activities, it noted, “The Federal Reserve Board agreed that GAO’s recommendations would benefit its response to future crises and agreed to strongly consider how best to respond to them.”
In his response to the GAO’s report, former Fed General Counsel Scott Alvarez wrote, “We appreciate the GAO’s substantial efforts to review these complex programs and the understanding of these programs that your report demonstrates.”
These are professionals that will carry out their responsibilities under Audit the Fed accordingly.
Ultimately, if we do not take on the enabler of government’s massive debt-and-spending addiction, we will undermine the full potential of the regulatory reform and tax cuts we have fought hard to achieve.
So those of us who believe that Congress must exercise its oversight responsibilities seriously, and who want to put America on firm financial footing for the long term, will continue to push back against fierce resistance and work to make this grassroots effort a reality.
I urge my colleagues to join me.