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crank republican vows to block auditing of the private sector federal
reserve:Judd Gregg, a New Hampshire Republican and Banking Committee
member said, I would not vote for any bill and I would filibuster any
bill that had this language in it
http://www.bloomberg.com/apps/news?pid=20601110&sid=aVhZHloa0sN8
Senator Vows to Block Removal of Fed’s Audit Shield (Update1)
By Scott Lanman and Alison Vekshin
Nov. 20 (Bloomberg) -- A U.S. senator said he would seek to block any
legislation containing a measure to remove the Federal Reserve’s
shield from congressional audits of the central bank’s interest-rate
decisions.
The House Financial Services Committee yesterday advanced a proposal
requiring audits of the Fed that was introduced by Representative Ron
Paul, a Republican from Texas. Senator Judd Gregg, a New Hampshire
Republican and Banking Committee member, said in an interview today
that the measure “would do fundamental damage to the strength of our
financial structure as a nation.”
“I would not vote for any bill and I would filibuster any bill that
had this language in it,” Gregg said, referring to the legislative
delaying tactic that requires 60 Senate votes to break.
Gregg’s comments indicate that legislation similar to Paul’s bill,
which has more than 300 House co-sponsors, would face resistance in
the Senate. That would help the Fed, which opposes the bill on the
grounds that it could reduce the central bank’s independence in
setting interest rates.
California Representative Brad Sherman, the highest ranking Democrat
on the House panel to vote for the Paul amendment yesterday, said in
an interview that he expected the provisions to be altered “to some
degree” as legislation moves through the House and Senate.
‘Terribly Popular’
“If it’s changed a whole lot, could that imperil the bill’s ultimate
passage? Yes,” Sherman said. The Paul audit bill won’t be “terribly
popular” in the Senate, he said.
Paul, author of a book entitled “End the Fed” that was published this
year, said yesterday that provisions in his amendment would limit
interference in monetary policy. The measure, co-sponsored by
Representative Alan Grayson, a Democrat from Florida, would exclude
any unreleased transcripts or minutes of Fed policy meetings. It calls
for an audit of the Fed and its 12 regional banks by the Government
Accountability Office within a year after enactment.
The committee voted first, 43-26, to substitute Paul’s proposal for a
Democratic measure to retain the ban on audits of monetary policy
while requiring more limited audits. Fifteen of 42 Democrats joined
the unanimous Republicans on the vote. Then, in a voice vote, the
committee attached the Paul measure to the broader bill.
Failed to Sway
A call from Fed Chairman Ben S. Bernanke two days ago failed to sway
Representative David Scott, a Democrat from Georgia, who voted in
favor of Paul’s measure.
“I said to him that what we’re interested in doing is sending the
right signals to Main Street,” Scott said. “The American people are
totally dissatisfied with the way the Fed, this administration have so
over-handed, disproportionately leaned toward helping the top of the
economic stream.”
Representative Barney Frank, the Massachusetts Democrat who chairs the
committee and opposed the Paul measure, said yesterday the issue “may
be revisited” when the legislation reaches the House floor.
“It’s going to be seen as weakening the independence of monetary
policy with consequent negative implications,” Frank told reporters
after the vote. “People are going to be worried about the impact on
the dollar, on the interest rate.”
Frank said he expects to finish the legislation in committee on Dec.
1, delaying a vote he had scheduled for yesterday until after
lawmakers return from the Thanksgiving holiday. He supported a
competing measure from Representative Mel Watt, a North Carolina
Democrat, to retain the ban on auditing monetary policy.
Make the Case
“The Fed needs to make the case for policy independence,” said former
St. Louis Fed President William Poole, now a senior fellow at the Cato
Institute in Washington. “The right place for the policy audit” is
congressional hearings on monetary policy, not through the GAO, Poole
said.
Gregg, 62, who was elected in 1992 and plans to retire from the Senate
next year, attributed the Paul legislation’s success to “populist
fervor” and lawmakers “pandering” to the public.
If the audit provisions become law, “you will fundamentally harm the
stability of the dollar and our ability to fight inflation, because
the Fed’s ability to deal with interest rates will be chilled by the
fear of congressional oversight,” Gregg said.
To contact the reporter on this story: Scott Lanman in Washington at
slanman at (no spam) bloomberg.net. Alison Vekshin in Washington at
avekshin at (no spam) bloomberg.net.
Last Updated: November 20, 2009 17:59 EST |
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