Audit the Fed Bill
Since its inception in 1913, the Federal Reserve has helped to devalue our dollar by 95%. During the recent economic crisis, it has poured trillions of dollars into the economy with no oversight, made secret agreements with foreign banks and governments, and has refused to tell Congress who is getting the money or to give it the details of what deals are being made.
HR 1207, Ron Paul’s “Audit the Fed bill,” and S 604, its Senate companion, will demand full transparency from the Federal Reserve for the first time in history by removing all restrictions from Government Accountability Office (GAO) audits of the Fed and mandating an audit by the end of 2010.
There are already 279 Cosponsors for HR 1207, and 20 cosponsors for S 604! A recent report showed that 75% of Americans support the Audit:
“ALEXANDRIA, Va.–(BUSINESS WIRE)–A recent poll conducted by highly respected Rasmussen Reports found that 75 percent of Americans support an audit of the Federal Reserve, our Nation’s secretive, quasi-governmental central bank. Only 9 percent of respondents opposed an audit, a further indication of overwhelming support for Fed transparency.”
Audit the Fed Petition
Full text of HR 1207
Full text of S604
For even more information go to: http://www.campaignforliberty.com/campaigns/hr1207home.php
Here is some correspondence to and from our Congressional representatives:
House Representative John Tanner:
“July 6, 2009
Thank you for contacting our office to express your support for H.R. 1207, the “Federal Reserve Transparency Act.” I appreciate you taking the time to share your thoughts with me on this issue.
H.R. 1207 was introduced in the House of Representatives on February 26, 2009. As you know, this legislation would expand the ability of the Government Accountability Office to audit the Federal Reserve and require an audit to be completed by the end of 2010.
This legislation has been referred to the Committee on Financial Services. While I am not a member of this particular committee, please know that I will keep your support for this bill in mind should it be presented on the floor for a vote.
Again, thank you for your comments. Please do not hesitate to contact our office if I can be of any further assistance.
Since I last wrote you on June 12, the number of cosponsors for HR 1207 Federal Reserve Transparency Act has grown to 279 and the related Senate bill S 604 has 20 cosponsors.
With a clear majority in the House of Representatives already cosponsoring this bill (ten away from a veto-proof majority), will you join over 90 of your fellow democrats and all of the House republicans in cosponsoring this bill? There are many people in this district that are closely watching this bill and want you to insist the FED be accountable to for their use of taxpayer money and their reduction in its purchasing power though unprecedented expansion of the money supply.
I encourage you to review HR 1207 and to become a cosponsor.
Senator Lamar Alexander:
“The audit? It’s a bad idea,” said Tennessee Sen. Lamar Alexander, head of the Republican Conference in the Senate. “It’s a sorry day when the Congress superimposes itself on the Fed, nosing around in monetary policy. It’s bad enough we are nosing around with the car companies.”
“July 21, 2009
Thanks very much for getting in touch with me and letting me know what’s on your mind regarding the Federal Reserve System.
In 1913, Congress created the Federal Reserve System to serve as the central bank of the United States in order to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded. Today, its duties include regulating banks and influencing credit conditions in pursuit of a stronger economy. You can learn more about the Federal Reserve’s history and current role at http://www.federalreserve.gov/pf/pdf/pf_1.pdf.
The Federal Reserve does not run on taxpayer dollars from Congress. In fact, each year the Federal Reserve returns any profits to the U.S. Treasury – including nearly $35 billion in 2008. However, by law the Federal Reserve is accountable to Congress. For example, members of its Board of Governors are confirmed by the U.S. Senate, and Federal Reserve officials must appear before congressional committees several times each year. In addition, the Federal Reserve must issue annual reports and undergo regular audits that cover most of its activities.
While ensuring that the Federal Reserve System remains accountable for its actions, Congress should not try to micromanage the Federal Reserve and weigh it down with overly burdensome reporting requirements. It was set up to be independent of the political trends in Washington, and it should remain that way.
I appreciate your taking the time to let me know where you stand. I’ll be sure to keep your comments in mind when the Federal Reserve is discussed and debated in Washington and in Tennessee.
“July 22, 2009
I want to thank you for your response to my request that you consider co-sponsoring S 604 “The Federal Reserve Sunshine Act.” I also want to thank your Jackson field representative, Matt, for being so kind and discussing this most important issue with me during a phone call last Friday, July 17. It was a good conversation and he is doing a good job for you here in Jackson.
As I write this letter, the President and certain members of Congress are threatening the American people that if we don’t pass yet another 1,000+ page bill before anyone even has a chance to read it our economy and nation as we know it will fail. As a very conservative Republican, I recognize that the majority of our problems are the unintended consequences of government involvement in areas in which it has no Constitutional authority. Health care seems to be the latest example of this and I hope that you vote “NO” for any expanded government medical program.
Despite the enormity of the recent “Cap and Trade” and the “Socialized Health Care” legislation, these two combined pale in comparison to one of the greatests dangers facing our economy. It is often said in baseball that the pitcher is the most important player, because he has a hand in every play of the game. Similarly, the most fundamental and important aspect of our economy is the very nature of our currency, as it is involved in every transaction.
This issue of money was strongly debated by the framers of our Constitution. The Founders were very much aware of the dangers of a currency that is devalued and debased to a point that it becomes worthless. They lived through the turmoil of the situation which gave birth to the phrase, “Worthless as a Continental dollar.” They ultimately decided that Congress should be responsible for this and gave them the authority “to coin money and regulate the value thereof” in Article 1 Section 8 of the Constitution. They never mentioned an independent central bank to serve this need of the people in this great document.
Despite the Founder’s concern and warnings, we resorted to “independent” central banking quite early in our history. Fortunately, we secured a President with the wisdom and the audacity to challenge the existence of such an institution on a Constitutional basis. Our fellow Tennessean, Andrew Jackson, vetoed the renewal of the 2nd National Bank of the United States in 1832, citing “that this great and powerful institution had been actively engaged in attempting to influence the elections of the public officers by means of its money.” Indeed, the bank of his day had become very powerful during its mere 16 years of existence.
Our current central bank, the Federal Reserve System, has been in operation since 1913, 80 years longer than its’ predecessor. During this time, our country has endured the Great Depression, numerous severe recessions and our dollar has lost 95% of its value. Recently, the FED has held interest rates at an historic low and the price inflation for all of this new money that was created through all the bailouts, stimulus and spending bills is on our doorstep. The FED has also made loans directly to banking institutions in excess of $2 trillion and Chairman Bernanke refuses to release the names of these firms who have received money guaranteed by the taxpayer to Congress and the American people.
It is for this reason that many Americans are calling on their representatives in Congress to demand an audit of the FED so the Congress can ensure that every measure is taken to ensure the credibility of our dollar. Even those who do not accept the view that central banking is unconstitutional can agree that we must at least have transparency with this institution. HR 1207 and S 604 would remove the following restrictions from Title 31, Section 714 of the United States Code, so that the GAO could perform a meaningful audit:
“(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;
(3) transactions made under the direction of the Federal Open Market Committee; or
(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection.”
We have the right to this information, and the audit of these areas will occur “after the fact,” so that it would not violate the independence of their actions.
I want to address some of the arguments you have made in opposition to an audit.
While the FED does not collect any direct taxes, you do not include the consequences of inflation in your figures. If we apply the typical annual inflation rate of 4% to the entire US economy, we arrive at a figure that dwarfs the $35 billion they paid to the Treasury in 2008. So, while we are not directly taxed by the FED, we are hit with a “hidden” inflation tax each year as the FED continuously expands the money supply.
While the FED currently undergoes “some” audits, how can the Congress hold them truly accountable with the current exemptions exist in Title 31, Section 714 as previously noted?
Most importantly is the issue of political independence and I agree with you and only wish that they were independent of politics. However, even now they are not independent and have arguably made decisions to suit the short-term interests of the executive branch, rather than the long-term interest of the economy and the American people. Of course, this is much more likely to happen when a Chairman desires reappointment by the President and could be influenced to hold the rates lower than the market is demanding in order to prolong the economic boom, thus making the correction much more severe when it finally occurs. Have we not witnessed the FED and the Treasury department acting in unison in recent years to promote the bailout legislation? To claim that they are currently independent of political influences is a weak argument for shielding them from a meaningful audit.
There are currently 17 cosponsors for S 604 in the Senate and 275 cosponsors for HR 1207 in the House, including ALL Republican House members. I don’t understand how you can take this stand given the public outcry and overwhelming support from within the GOP?
Once this legislation is explained to someone, they immediately recognize the need and are supportive. This is why Americans are demanding such an audit and those in Congress are hearing the message.
We are not demanding an end to the FED’s independence, but rather an end to their secrecy.
Senator Bob Corker:
“June 17, 2009
Thank you for contacting my office regarding S. 604, the Federal Reserve Sunshine Act. Your input is important to me, and I appreciate the time you took to share your thoughts.
Like you, I understand the importance of having strong federal monetary policy with appropriate oversight measures, particularly during these difficult economic times. S. 604 would require the Comptroller General of the Government Accounting Office (GAO) to audit portions of the Federal Reserve that are currently exempt from audit. Due to the Federal Reserve’s active role in trying to diffuse systemic economic risks, I believe access to certain Federal Reserve records is important to ensure appropriate oversight. As a member of the Senate Banking, Housing, and Urban Affairs Committee, I look forward to working with my colleagues to provide better transparency of federal expenditures.
Thank you again for your letter. I hope you will continue to share your thoughts with me as I serve you in the United States Senate.
United States Senator”
Recently in a Senate Banking committee meeting, Corker said to FED Chairman Bernanke:
“I hope that you’ll do everything you can to make sure the Fed maintains its independence.
I can’t imagine a greater catastrophe for our country… for folks like us (in Congress), or in the Administration, getting involved in monetary policy.
I urge you to do everything you can to stay independent, and hope that we will enable that to happen.”
The video URL:
See explanation in Alexander letter, which speaks to this point of independence versus secrecy.