I’m proud to be a co-sponsor of the Federal Reserve Transparency Act, which was introduced by Rep. Ron Paul (R-TX), to remove restrictions that currently prohibit the Government Accountability Office (GAO) from conducting investigations of the Federal Reserve. This bill would also require an audit of all Federal Reserve operations to be completed by the end of 2010.
The lack of transparency and accountability regarding federal tax dollars that are being used by the Federal Reserve and the U.S. Treasury Department to prop up our economy raises serious concerns. I’ve asked countless times for detailed explanations of how these dollars are being spent and what the plan is for the government to get back out of the private sector but have yet to receive an answer. The bulk of dollars committed by the Federal Reserve under the Troubled Asset Relief Program (TARP) has been done with little to no transparency.
Currently, the GAO can audit all of the non-monetary functions performed by the Federal Reserve but can’t touch transactions with foreign central banks or governments; deliberations, decision or actions on monetary matters, including “discount window operations,” reserves of member banks, securities credit, interest on deposits, and open market solutions; and transactions made under the direction of the Federal Open Market Committee. The Federal Reserve Transparency Act would remove all of these restrictions, and allow GAO to get real answers from the Federal Reserve to protect American taxpayers.
I voted for the Helping Families Save Their Homes Act, which was signed into law on May 20 and allows GAO to audit any assistance the Federal Reserve gives to individual corporations under its emergency authority, but overall auditing of Fed emergency actions is still prohibited. While this was a good step, it didn’t go far enough, which is why I believe we need to enact the Federal Reserve Transparency Act.