Rep. Ron Paul, R-Texas, will not become president and his career in elected office draws to a close with the end of the current Congress. But according to the Houston Chronicle, the House has given Paul a rare legislative victory.
The House passed the bill by an overwhelming 327 to 98 vote, according to the Washington Times.
Federal Reserve Transparency Act of 2012
The bill, also known as H.R. 459, would allow congressional investigators to perform an audit on the Board of Governors of the Federal Reserve System and the Federal Reserve banks. The results of the audit would be reported to the Comptroller General of the Congress within 12 months of the enactment of the bill. The audit would include such questions as "the guidance given by the Board of Governors of the Federal Reserve System to independent consultants retained by the supervised financial institutions regarding the procedures to be followed in conducting the file reviews; the factors considered by independent consultants when evaluating loan files; the results obtained by the independent consultants pursuant to those reviews; the determinations made by the independent consultants regarding the nature and extent of financial injury sustained by each homeowner as well as the level and type of remediation offered to each homeowner; and the specific measures taken by the independent consultants to verify, confirm, or rebut the assertions and representations made by supervised financial institutions regarding the contents of loan files and the extent of financial injury to homeowners."
Opposition to the bill
The opposition to the bill, according to the Washington Times, came from the Chairman of the Federal Reserve Ben Bernanke and the House Democratic leadership. Bernanke feels that subjecting the fed to congressional oversight, which the bill would do, would eliminate the independence of the Federal Reserve which he feels is vital for the fed's management of monetary policy. The sole Republican to vote against the bill, Rep. Robert L. Turner of New York, stated that the bill might politicize what has hitherto been an independent institution. That stance was echoed by Democratic opponents of the bill. Passage in the Senate is in some doubt, thanks to the opposition of Senate Majority Leader Harry Reid, who had previously favored auditing the Fed.
The Federal Reserve
According to the Federal Reserve website, the Fed is the central bank of the United States, a lender of last resort for banks in the United States. The Federal Reserve consists of a board of governors and 12 regional banks throughout the United States. By setting interest rates, the Federal Reserve acts to fight inflation and to foster economic growth during times of recession. The Federal Reserve was established by the Federal Reserve Act of 1913.
Ron Paul and the Federal Reserve
Paul has long believed that the Federal Reserve is both unconstitutional and corrupt, as he explains in the 2009 book "End the Fed." Paul would like to abolish the Federal Reserve, though as he explains on his campaign website, he would like to at the very least subject the Fed to congressional oversight. Paul believes that this would establish sound money in the United States and stop the devaluation of the dollar and what he regards as an artificial boom and bust cycle caused by the Fed.
Texas resident Mark Whittington writes about state issues for the Yahoo! Contributor Network.