The House on Wednesday passed legislation to audit the Federal Reserve System.
Passed 333-92, the bill would require the comptroller general to conduct an audit of the Federal Reserve's board of governors and banks within one year and submit a report to Congress on the findings. A total of 106 Democrats joined all but one Republican in support of the measure.
A version of the bill sponsored by then-Rep. Ron Paul (R-Texas) passed in 2012 by a vote of 327-98. Paul's son, Sen. Rand PaulRand PaulGOP senators move to keep women out of military draft McConnell pressuring Rubio to run again Libertarian ticket will get super-PAC support MORE (R-Ky.), has introduced companion legislation in the Senate.
Rep. Paul BrounPaul BrounCalifornia lawmaker's chief of staff resigns after indictment Republican candidates run against ghost of John Boehner The Trail 2016: Let’s have another debate! MORE (R-Ga.), who failed to advance in a Senate GOP primary earlier this year, said the measure would increase transparency at the Federal Reserve.
Rep. Thomas Massie (R-Ky.) argued the central bank should make its functioning more open to the public.
"Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations," Massie said.
But Rep. Elijah Cummings (D-Md.) said that exposing the Federal Reserve's communications to public scrutiny would politicize the monetary system. He warned that officials could become wary of communicating with each other in ways that they know would become public, and that Congress would interfere with the Federal Reserve's decision-making.
"If enacted, this bill would severely curtail the independence that has been a hallmark for the Federal Reserve and has been essential to its ability to strengthen our country," Cummings said. "Such audits, which could be conducted on an almost real-time basis under this bill, could have a chilling effect on the Fed."
Federal Reserve Chairwoman Janet Yellen has objected to the auditing proposal. At a February House Financial Services Committee hearing, Yellen said that while the Federal Reserve "should be transparent," such a measure would be "interfering with the independence of monetary policy, by bringing political pressures to bear on the committee’s judgment."