Kucinich Introduces Legislation to Audit Federal Reserve’s Response to Economic Crisis
WASHINGTON - Congressman Dennis Kucinich (D-OH) has introduced legislation that would allow, for the first time, the government to audit and oversee the Federal Reserve's response to the economic crisis. H.R. 2424, The Federal Reserve Credit Facility Act of 2009 would authorize the Government Accountability Office (GAO) to audit, review and investigate the activities of the Federal Reserve (the Fed) in response to the economic crisis gripping our nation. The bipartisan bill is cosponsored by Chairman Ed Towns (D-NY) and Ranking Member Darrell Issa (R-CA) of the Oversight and Government Reform Committee, as well as Jim Jordan (R-OH), the Ranking Member of the Domestic Policy Subcommittee, which is chaired by Kucinich. The bill has been referred to the Oversight and Government Reform Committee for consideration.
"The Federal Reserve has been operating in a governmental netherworld, free from scrutiny or oversight. We know the Fed has printed and loaned trillions of dollars, but we don't know where the money went. This bill will finally provide some transparency," said Kucinich.
Traditionally the Federal Reserve has limited itself to setting the federal funds rate target (the overnight interest rate that banks charge each other) by purchasing government securities. Since August 2007, the Fed has drastically expanded its role in our economic stability by enacting programs to print and lend trillions of dollars directly into the economy.
"Despite the fact that the Fed's actions are a centerpiece of our nation's response to our economic recovery, we know almost nothing about how the Federal Reserve has addressed the crisis. It's time investors and taxpayers obtained a clear picture," added Kucinich.
The Fed has enacted several new programs to address the financial system's crisis including the Term Asset-Backed Securities Loan Facility (TALF), the Mortgage Backed Securities Purchase Program, and a number of other emergency lending programs that are not subject to Congressional oversight.