Broad Bipartisan Coalition Fighting Fed In Senate

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by
Huffington Post

Broad Bipartisan Coalition Fighting Fed In Senate

by
Ryan Grim

(Image by r0b0r0b at flickr - Creative Commons License)

As unusual a coalition as can be crafted in the Senate plans to
fight for an amendment to the Wall Street reform bill that would open
the Federal Reserve to a serious audit by the Government Accountability
Office. Sponsored by Sen. Bernie Sanders (I-Vt.), the language is
modeled after an amendment that passed the House, sponsored by Reps.
Alan Grayson (D-Fla.) and Ron Paul (R-Texas).

Sanders is joined by four Republicans of varying politics: John
McCain (Ariz.), Jim DeMint (S.C.), David Vitter (La.) and Sam Brownback
(Kan.). If Democrats in the Senate back the measure, it would have at
least 63 votes, but Banking Committee Chairman Chris Dodd (D-Conn.) is
opposed and has argued against a broad audit.

The chairman of the Judiciary Committee, Sen. Pat Leahy (D-Vt.), is
also a cosponsor, as is Sen. Russ Feingold (D-Wisc.). The group is
actively gathering cosponsors as the Senate continues to vote to break
a GOP filibuster which is preventing debate from beginning.

"For nearly nine decades, the GAO has a proven track record of
conducting objective, fact-based, nonpartisan, non-ideological, fair,
and balanced audits. Through these audits, the GAO helped save the
American taxpayers $50 billion last year alone by rooting out waste,
fraud, and abuse in the federal government," reads a letter circulated
by Sanders. "Let's not equate independence with secrecy. We cannot let
the Fed operate in secrecy any longer. There is simply too much money
at stake."

Read the letter:

Support the
Sanders-Feingold-DeMint-Leahy-McCain-Vitter-Brownback Federal Reserve
Transparency Amendment to the Financial Reform Bill

The American people have a right to know who received over $2 Trillion in financial assistance from the Federal Reserve.

Since the beginning of the financial crisis, the Federal Reserve has
provided over $2 trillion in taxpayer-backed loans and other financial
assistance to some of the largest financial institutions and
corporations in the world. Unfortunately, the Fed is still refusing to
tell the American people or the Congress who received most of this
assistance, how much they received or what they are doing with this
money. This money does not belong to the Federal Reserve, it belongs to
the American people, and the American people have a right to know where
their taxpayer dollars are going.

Therefore, during the consideration of the financial reform bill, we
will offer an amendment to increase transparency at the Federal
Reserve. Specifically, our amendment:

* Requires the non-partisan Government Accountability Office (GAO) to
conduct an independent and comprehensive audit of the Federal Reserve
within one year after the date of enactment of the financial reform
bill;

* Requires the GAO to submit a report to Congress detailing its
findings and conclusion of their independent audit of the Fed within 3
months; and

* Requires the Federal Reserve within one month after the date of
enactment to disclose the names of the financial institutions and
foreign central banks that received financial assistance from the Fed
since the start of the recession, how much they received, and the exact
terms of this taxpayer assistance.

* Does not interfere with or dictate the monetary policies or decisions of the Federal Reserve.

59 Senators, 320 Members of Congress, and two federal courts have called on the Federal Reserve to become more transparent.

Our amendment is similar to an amendment that was offered to last
year's Budget Resolution that passed the Senate on a bi-partisan vote
of 59-39 on April 1, 2009; S.604, the Federal Reserve Sunshine Act that
now has 33 bi-partisan co-sponsors; and the Federal Reserve
Transparency Act (H.R. 1207) that has 320 bi-partisan co-sponsors (a
version of which passed the House Financial Services Committee by a
vote of 43-28 and was incorporated into the financial reform bill that
passed the House last December).

In August of 2009, the United States District Court for the Southern
District of New York also ordered the Fed to disclose the recipients of
this taxpayer assistance as a result of a Freedom of Information Act
lawsuit filed by Bloomberg News. This decision was upheld by the U.S.
Court of Appeals in Manhattan on March 19, 2010.

The Senate Financial Reform Bill does not do enough to make the Fed more transparent.

While the Senate financial reform bill attempts to address the lack of
transparency at the Fed, as currently drafted, much of the information
regarding the details of who received this financial assistance could
be kept secret forever.

As long as the Federal Reserve is allowed to keep the information on
their loans secret, we may never know the true financial condition of
the banking system. The lack of transparency at the Fed could lead to
an even bigger crisis in the future.

We now know that the lack of transparency in credit default swaps led
to the $182 billion taxpayer bailout of AIG; the collapse of Lehman
Brothers and precipitated the worst financial crisis since the Great
Depression.

We know who received TARP funding.

Anyone with access to the internet can go onto the Treasury
Department's website and find out exactly who received a bail-out from
the $700 billion TARP program. The American people have a right to know
the same information from the Fed.

The Sanders Amendment does not undermine the Fed's independence.

This amendment does not take away the "independence" of the Fed and it does not put monetary policy into the hands of Congress.

This amendment does not tell the Federal Reserve when to cut short-term
interest rates or when to raise them. It does not tell the Federal
Reserve what banks to lend money to and what banks not to lend money
to. It does not tell the Federal Reserve what foreign central banks
they can do business with and which ones it cannot do business with. It
does not impose any new regulations on the Federal Reserve nor does it
take any regulatory authority away from the Fed.

This amendment simply requires the GAO to conduct an independent audit
of the Fed and requires the Fed to release the names of the recipients
of more than $2 trillion in taxpayer-backed assistance.

For nearly nine decades, the GAO has a proven track record of
conducting objective, fact-based, nonpartisan, non-ideological, fair,
and balanced audits. Through these audits, the GAO helped save the
American taxpayers $50 billion last year alone by rooting out waste,
fraud, and abuse in the federal government.

Let's not equate independence with secrecy. We cannot let the Fed
operate in secrecy any longer. There is simply too much money at stake.

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