Romney: Time to fully audit the Fed

By Peter Schroeder - 08/20/12 04:59 PM ET

Mitt Romney believes it is time for the nation's central bank to open up for an audit.

The presumptive Republican presidential candidate made clear that he favored a comprehensive audit of the Federal Reserve, attaching himself to growing pet cause of conservatives and liberals alike.

"The answer is yes to that, very plain and simple," he said when asked if it was time to audit the Fed at a town hall in Manchester, N.H. "The Federal Reserve should be accountable. We should see what they're doing."

Prior to that statement, Romney's stance on the Federal Reserve had been somewhat murky. In June, he told CNBC that the Fed should not embark on a third round of "quantitative easing" in an effort to boost the economy, and has said he would not renominate Fed Chairman Ben Bernanke to serve a third term when his current one expires in 2014.

But while some Republicans on the campaign trail threw out tough talk targeting the central bank — Texas Gov. Rick Perry notoriously warned it would be "almost treasonous" for the Fed to adopt new stimulative policies before the election — Romney typically offered a more measured stance.

In 2009, Romney told Larry King that he thought Bernanke was doing a "good job" in the wake of the financial meltdown, although he said in a debate last fall he favored the Fed becoming more transparent.

While Romney threw his support behind a Fed audit Monday, he still made clear he wanted the nonpolitical institution to remain free from second-guessing by Congress.

"I don't want to have Congress run the Fed, by the way. I want to keep it independent," he said. "There are very few groups that I would not want to give the keys to. One of them in Congress."

Just before Congress broke for its month-long August recess, the House easily passed a bill introduced by Rep. Ron Paul (R-Texas) that would subject the Fed to a full audit of its operations, including its monetary policy decisions. Roughly half of House Democrats supported the measure, and just one Republican — Rep. Bob Turner (N.Y.) — opposed it on its way to a 327-98 approval.

At that time, Romney tweeted the the bill was a "reminder of [Paul's] tireless efforts to promote sound money and a more transparent Federal Reserve."

While Paul's bill easily cleared the House, it is not expected to make any headway in the Senate, where Senate Majority Leader Harry Reid (D-Nev.) does not plan to bring it up for consideration.

Bernanke came out strongly against the bill days before it gained House approval, warning it could create a "nightmare scenario" for the Fed, with Congress second-guessing its every move. He also pointed out that the Fed is already subject to multiple governmental audits, just not of its monetary policy decisions.

Romney's more explicit stance on a Fed audit comes as he has added a fierce Fed critic to the ticket as his vice-presidential pick. House Budget Committee Chairman Paul Ryan (R-Wis.) co-sponsored Paul's bill to fully audit the Fed — along with 268 other members of both parties. And Ryan has said he would favor changing the law to require the Fed to focus just on controlling inflation, as opposed to balancing price stability with maximizing employment. He has also been a vocal member of a growing Republican concern about the Fed's recent efforts to boost the economy, warning it could wreak havoc on the dollar.

"There is nothing more insidious that a country can do to its citizens than debase its currency," he said in December 2010.