House lawmakers want to pry open the books of the
famously secretive Federal Reserve with legislation that would subject
the central bank to a sweeping congressional audit.
The effort is
overwhelmingly bipartisan. Hardline conservatives and liberal Democrats
have banded together in their criticism of the Fed as a major power
broker in the financial system that doesn't answer to Congress.
debate comes as lawmakers consider a proposal by President Barack Obama
that would give the Fed new powers to prevent another economic crisis.
in my district thinks that the Fed has done such a wonderful job of
running the economy that we should continue to cloak them with secrecy
for the purpose of protecting them from second-guessing criticism,"
said Rep. Brad Sherman, a California Democrat.
The Fed is pushing
back, warning that its ability to stabilize prices and monitor interest
rates would be compromised if it knew politicians were looking over its
shoulder.The House proposal would "cause the markets and the public to lose confidence in the independence and the judgments of the
Federal Reserve," Scott Alvarez, the board's top lawyer, told the House
Financial Services Committee in testimony.
The legislation is
championed by Rep. Ron Paul, a Texas Republican whose extreme
libertarian bent usually doesn't generate consensus in Congress. But as
of Friday, Paul's legislation had attracted 295 co-sponsors with a
range of political philosophies, including Hawaii liberal Rep. Neil
Abercrombie and Rep. Jeb Hensarling, an outspoken conservative from