July 26, 2012 | By | Posted in General News

Majority of delegation backs ‘Audit the Fed’ bill in U.S. House

By Eric Boehm | PA Independent

The Federal Reserve bank in Washington, D.C.

HARRISBURG — Pennsylvania’s congressional delegation overwhelmingly voted for auditing the Federal Reserve, America’s central bank, as part of an effort to determine the bank’s role in the nation’s economic woes.

Of the 19-member delegation, only Democrats Bob Brady of District 1, Chaka Fattah of District 2 and Allyson Schwartz of District 13 voted against the Federal Reserve Transparency Act, or “Audit the Fed” bill.

The final vote in the U.S. House on Wednesday was 327-98.

The measure requires that the Fed, the 100-year-old quasi-private bank that sets the country’s monetary policy, undergo a strict audit by the nonpartisan Government Accountability Office. The legislation allows the GAO to examine the Federal Reserve’s balance sheet without the restrictions currently in place.

Further, the audit must focus on “independent consultants” working for large financial institutions, who influenced much of the central bank’s emergency loans during the financial crisis that led to the 2008 economic collapse, according to the bill.

U.S. Rep. Bill Shuster

In a statement released after the vote, U.S. Rep. Bill Shuster, R-District 9, said reviewing and auditing the Fed’s monetary policy operations and agreements with foreign banks made sense.

“It’s time for real transparency and for taxpayers to know what is happening with their hard earned dollars,” Shuster said.

U.S. Rep. Tom Marino

In a separate statement, U.S. Rep. Tom Marino, R-District 10, said the bill was “a much needed step” toward increased accountability and transparency.

“The Federal Reserve is one of the most secretive and powerful agencies in Washington,” Marino said. “It’s time for the Federal Reserve to be held accountable, and it’s time someone took a look at its $3 trillion balance sheet.”

Last week, Federal Reserve Chairman Ben Bernanke warned House members that opening the bank to an audit would create a “nightmare scenario” of political meddling in the central bank.

Texas U.S. Rep. Ron Paul, best known for his three presidential runs, has long argued that the bank meddles too much on its own. He has spent much of his 22 years in Congress trying to pry open the secretive books of the nation’s central bank. He is retiring at the end of the current session.

U.S. Rep. Ron Paul, R-Texas

On the House floor on Tuesday, Paul blasted the Federal Reserve once again.

It bails out all the wealthy, rich people, the banks, the big corporations, international and overseas banks, bailing out Europe and dealing with the central banks in Europe,” he said.

A previous version of the “Audit the Fed” bill — included in an amendment to the Dodd-Frank Wall Street Reform Act of 2010 — revealed that companies such as General ElectricJPMorgan Chase and Goldman Sachs received hundreds of billions of dollars in low-interest Federal Reserve loans. This occurred “at the same time that senior executives at these institutions served on the Federal Reserve’s regional board of directors,” U.S. Sen. Bernie Sanders, I-Vt., confirmed in a letter to Bernanke in December 2010.

poll conducted by Bloomberg in December 2010 found that nearly 55 percent of Americans polled believe the Fed should either be more accountable or outright abolished.

The survey was conducted with 1,000 U.S. adults and had a margin of error of 3.1 percentage points.

Yael Ossowski of Florida Watchdog contributed to this report.

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Eric Boehm is a reporter for PA Independent. He can be reached at or at (717) 350-0963.

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