Rand Paul: No Fed Audit Vote, No Yellen Confirmation
Senator Rand Paul has promised to place a hold on Fed Chair nominee Janet Yellen’s confirmation if the Senate doesn’t put his “Audit the Fed” bill to a vote first. Unlike most bills the current congress sees, there isn’t a split view on the issue, a version of the bill overwhelmingly passed the House 327-98 last year. No longer a conservative versus liberal push, the only people pushing back are Democratic Congressional leaders who are backing current Fed Chair Ben Bernanke who opposes the bill because it could cost the Fed its “independence.”
The Fed’s independence is up for debate. Certainly, there is some politicization considering the president nominates a chairperson every six years. The Federal Reserve was created by Congress to improve the economy in the early-1900s and has since seen a huge increase in power. Originally given three objectives; maximum employment, stable prices, and moderate long-term interest rates, the Fed now decides all monetary policy, regulates banks, and even has a foreign relations wing that deals with foreign financial institutions. Far from the “economic stabilizer” it was meant to originally be, perhaps the Fed has grown too big to veil.
Paul’s Audit the Fed bill, much like his father Ron Paul’s bill in the House, would allow the Comptroller General to audit the Federal Reserve’s funding facilities, open market operations, discount window, and agreements with foreign bankers. The bill also mandates that the results be made available to Congress. While the Federal Reserve is audited by an independent auditor every year, Ron Paul argues that “the present audit process exempts the Fed’s most crucial activities.”
Tying the vote to Yellen’s confirmation is a desperation move but it’s one that could force Harry Reid’s hand and push him to finally put the Audit the Fed bill that passed so overwhelmingly in the House to a Senate vote. While all but one Republican voted for it in the House, much of the support has come from the left. Aside from the more than 90 House Democrats who voted for the bill, Audit the Fed is supported by the presidents of the biggest unions in the country, including the AFL-CIO, SEIU, and United Steelworkers. With plenty of Democratic support, the only thing standing in the bill’s way is Senate Majority Leader Harry Reid.
(Photo: Courtesy of Gage Skidmore)