Several senior House Democrats warned that passing a bill from Rep. Ron
Paul (R-Texas) requiring a full audit of the Federal Reserve Board's
monetary policy decisions will allow Congress greater leverage to put
political pressure on these decisions, which they said would cause
serious problems in the U.S. and global financial markets.
The
Federal Reserve Transparency Act, H.R. 459, was expected to come up for a
vote Wednesday, and seemed poised for passage given its 270 co-sponsors,
including nearly four dozen Democrats. Nonetheless, many Democrats used
the Tuesday floor debate to warn about the chances that Congress might
use the audit to politicize monetary policy decisions.
"This bill would instead jeopardize the Fed's independence by subjecting its decisions on interest rates and monetary policy to GAO audit," said House Minority Whip Steny Hoyer (D-Md.). "I agree with [Fed] Chairman [Ben] Bernanke that congressional review of the Fed's monetary policy decisions would be a 'nightmare scenario,' especially judging by the track record of this Congress when it comes to governing effectively."
Read more from The Hill's Floor Action blog.
