Controversial legislation to subject the Federal Reserve’s monetary policy powers to outside scrutiny is getting new life in Washington.
Rep. Thomas Massie (R-Ky.) and Sen. Rand PaulRand PaulWe can put America first by preventing public health disasters Conservative activists want action from Trump McConnell: 'Big challenge' to pass ObamaCare repeal in Senate MORE (R-Ky.) have re-introduced legislation to “Audit the Fed,” after a similar effort stalled in the last Congress.
But such a proposal, which has been vocally opposed by Federal Reserve Chairwoman Janet Yellen, may face its best odds ever of becoming law. Both chambers are controlled by Republicans long critical of the Fed’s policies, and President-elect Donald TrumpDonald TrumpTrump's Hollywood Walk of Fame star defaced Report: Senate's Russia probe understaffed Trump won't comment on Le Pen's advancement in French election MORE has heaped scorn on the central bank since the beginning of his presidential campaign.
Paul specifically mentioned Trump in a statement about the bill Wednesday, making clear the measure’s proponents believe they have an ally in their cause coming to the White House.
“The U.S. House has responded to the American people by passing Audit the Fed multiple times, and President-elect Trump has stated his support for an audit. Let’s send him the bill this Congress,” said Paul.
Under the bill, the Fed’s monetary policy deliberations could be subject to outside review by the Government Accountability Office.
Proponents of the measure argue that the Fed is too powerful and lacks sufficient oversight for its interest rate decisions. But Fed officials from Yellen on down, as well as other critics, have warned that such a policy could subject the Fed to undue political pressure and discourage it from taking unpopular steps for the good of the overall economy.
The proposal has garnered some bipartisan support and has passed the House several times in past Congresses.
But the measure has typically stalled in the Senate. Senate Democrats refused to bring up the bill for consideration when they controlled the chamber, and senators rejected the bill in 2016 after it was brought up by the new GOP majority.
Two non-Republican senators — Bernie SandersBernie SandersPelosi: 'Of course' Dems can be against abortion Kasich: 'I think political parties are on their way out' Sanders: Democratic Party's model is 'failing' MORE (I-Vt.) and Tammy BaldwinTammy BaldwinLawmakers talk climate for Earth Day, Science March Trump says he supports Dem ‘Buy America’ bill Picking 2018 candidates pits McConnell vs. GOP groups MORE (D-Wis.) — voted for the measure then. Only one Republican, Sen. Bob CorkerBob CorkerGroups warn of rural health 'crisis' under ObamaCare repeal Ringing the alarm in Congress: 20 million lives at risk due to famine Senators want more efficient way to get food aid to Africa MORE (Tenn.), opposed it.
But the situation is different in 2017, as lawmakers who assumed President Obama would veto any “Audit the Fed” legislation in the past now are anticipating a White House with a vocal Fed critic at the helm.
Trump singled out the Fed frequently for criticism during the presidential campaign, arguing during presidential debates that the institution was deliberately keeping interest rates low for Obama’s political benefit.
Fed officials are fiercely protective of their reputation as pursuing policies free of political motivation, and Yellen has shot down any notion of partisan intent in its policymaking.
But lawmakers hoping to overhaul how the Fed does business see an opening in 2017.
“It is time to force the Federal Reserve to operate by the same standards of transparency and accountability to the taxpayers that we should demand of all government agencies,” said Massie.