Senate rejects Paul’s push to audit the Fed
© Greg Nash

The Senate on Tuesday rejected Sen. Rand PaulRandal (Rand) Howard PaulMedia fails spectacularly at smearing Rand Paul for surgery in Canada Rand Paul to have hernia surgery in Canada Ron Paul: Remove incentives for illegal immigrants instead of building border wall MORE’s (R-Ky.) controversial proposal to audit the Federal Reserve, turning aside a bill that has drawn the ire of the business community and the White House. 

The Senate voted 53-44 on taking up the presidential hopeful’s measure. Sixty votes were needed to move forward.

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Paul won some bipartisan support for the legislation, with Sen. Bernie SandersBernard (Bernie) SandersBrown launches tour in four early nominating states amid 2020 consideration Gillibrand announces exploratory committee to run for president on Colbert Dem chairman Cummings meets with Trump health chief to discuss drug prices MORE (I-Vt.), another presidential candidate, voting in favor. Democratic Sen. Tammy BaldwinTammy Suzanne Baldwin116th Congress breaks records for women, minority lawmakers Kyrsten Sinema swears in to Congress using copy of Constitution instead of religious book Dems say Trump is defying court order by pushing abstinence programs MORE (Wis.) backed the bill as well.

Sen. Marco RubioMarco Antonio RubioOvernight Defense: Trump faces blowback over report he discussed leaving NATO | Pentagon extends mission on border | Senate advances measure bucking Trump on Russia sanctions Senate advances measure bucking Trump on Russia sanctions Rubio slams NY Times for 'absurd criticism' of Bolton over Iran MORE (R-Fla.), who is also running for president, supported moving forward with Paul’s legislation, while White House rival Sen. Ted CruzRafael (Ted) Edward Cruz5 takeaways from Barr’s testimony Republicans seek to temper fallout from latest Russia bombshells Cruz says Americans outside Beltway unconcerned with Mueller investigation MORE (R-Texas) missed the vote. Sen. Bob CorkerRobert (Bob) Phillips CorkerThe Memo: Romney moves stir worries in Trump World Senate GOP names first female members to Judiciary panel Former US special envoy to anti-ISIS coalition joins Stanford University as lecturer MORE (Tenn.) was the only Republican to vote against the bill. 

Paul had pressured Sanders and Sen. Elizabeth WarrenElizabeth Ann WarrenBrown launches tour in four early nominating states amid 2020 consideration Gillibrand announces exploratory committee to run for president on Colbert Native American group denounces Trump for using Wounded Knee in attack against Warren MORE (D-Mass.) to back his proposal, portraying it as a test of their commitment to taking on Wall Street.

“We’ve had a lot of Democrats who claim that they’re concerned about big banks and big banks controlling things and a revolving door between Wall Street and big banks and the Federal Reserve,” Paul told reporters during a conference call Monday. “We’ll see if any of those loud voices — Bernie Sanders, Elizabeth Warren — are they loud voices that really are for more oversight of the banking system?” 

Warren voted against the bill. 

Sanders, who in the past worked with Paul’s father, former Rep. Ron Paul (R-Texas), on similar “Audit the Fed” legislation, said the new bill would help build on his 2010 push to require an audit of the central bank’s emergency lending.

“Requiring the Government Accountability Office to conduct a full and independent audit of the Fed each and every year, would be an important step towards making the Federal Reserve a more democratic institution that is responsive to the needs of ordinary Americans rather than the billionaires on Wall Street,” the Independent senator said in a statement. 

Paul’s legislation, which would increase congressional oversight of the Fed and require it to undergo an audit by the Government Accountability Office, faced an uphill battle. Ahead of the vote, only 26 Republicans had signed on as co-sponsors.

Sen. Dick DurbinRichard (Dick) Joseph DurbinTrump AG pick: I won't be 'bullied' by anyone, including the president Live coverage: Trump AG pick grilled on Mueller probe at confirmation hearing Senate Dems set to take aim at new Trump attorney general pick MORE (D-Ill.) told The Hill while he expected the vote would be close, “at this point I think it’s going to be difficult for the Republicans to get 60 votes.”

Democrats suggested that Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellOn The Money: Shutdown Day 25 | Dems reject White House invite for talks | Leaders nix recess with no deal | McConnell blocks second House Dem funding bill | IRS workers called back for tax-filing season | Senate bucks Trump on Russia sanctions Mellman: Why does the GOP persist? Leaders nix recess with no shutdown deal in sight MORE (R-Ky.), who supported the bill, was wasting floor time by making Paul’s legislation the first bill of 2016. McConnell backs Paul’s presidential run.

Senate Minority Leader Harry ReidHarry Mason ReidHarry Reid knocks Ocasio-Cortez's tax proposal: Fast 'radical change' doesn't work Overnight Defense: Trump rejects Graham call to end shutdown | Coast Guard on track to miss Tuesday paychecks | Dems eye Trump, Russia probes | Trump talks with Erdogan after making threat to Turkey's economy Harry Reid on Iraq War vote: 'It tainted my heart' MORE (D-Nev.) dismissed Paul’s proposal as a “sham.”

“Republicans have been trying to undermine the Federal Reserve mandate to strive toward full employment,” he added on Tuesday morning.

Sen. Sherrod BrownSherrod Campbell BrownBrown launches tour in four early nominating states amid 2020 consideration Pro-Trump group doing opposition research on Sherrod Brown’s wife: report Press: White House not only for white males MORE (D-Ohio), the ranking member of the Banking Committee, added ahead of the vote that the legislation “really solves nothing but to politicize the Fed.” 

For Paul, the vote in the Senate was a chance to grab the spotlight ahead of a weekend trip to New Hampshire, the second contest in the Republican primary.

After a promising start, he has struggled to break out in the field and is now coming in near the bottom of the polls. 

Fox Business Network announced that the Kentucky Republican didn’t qualify for the main-stage debate on Thursday night, and Paul has refused to participate in the earlier undercard bout.

Republicans broadly argue that recent policy decisions by the Federal Reserve — including its handling of the 2008 financial crisis — underscore the need for more oversight of the powerful central bank.

Sen. Pat Toomey (R-Pa.), who is up for reelection in November, said that while he had been skeptical of Paul’s legislation, “the dangerous behavior that the Fed has engaged in for years now means they have squandered the right to be independent.”

Sen. Richard Shelby (R-Ala.), the chairman of the Senate Banking Committee, had previously voiced opposition to Paul’s proposal, but voted Tuesday to move forward with it.

“I think we ought to debate it,” he told reporters on Monday evening. “I’m interested in oversight and that might be what he’s interested in.”

Federal Reserve officials have fought fiercely against Paul’s legislation, suggesting that it would allow Congress to weigh in on financial policy “in real time.”

Fed Chairwoman Janet Yellen sent a letter to Senate leadership late last week saying that she opposes the bill and warning, if signed into law, it could damage the economy.

The White House last year called Paul’s proposal “dangerous.”

“What that bill is about is about Congress supplanting its judgment as to what monetary policy should be,” said Jason FurmanJason FurmanThe need for transparency and reform in proxy voting Ocasio-Cortez rips presence of lobbyists at orientation event On The Money: Economy adds 250K jobs in October | Trump confident on trade deal with China | Trump to reimpose all Iran nuke sanctions | 8 nations to get oil waivers | SEC subpoenaed Tesla over Model 3 production MORE, chairman of Obama’s Council of Economic Advisers. “Congress shouldn’t be telling the Fed what to do with monetary policy.”

Business groups had also expressed strong opposition to the bill.

The U.S. Chamber of Commerce, the most powerful industry lobby in Washington, issued an open letter urging senators to vote against the legislation, calling it “unnecessary.”

“Creating outside pressures that could politicize monetary policy decisions would likely harm the market foundations needed to fuel the free enterprise system,” wrote Bruce Josten, the Chamber’s executive vice president of government affairs.

Tuesdays’ vote was the first time Paul’s legislation was allowed to come up. 

Conservative groups rallied behind the measure, with FreedomWorks legislative affairs manager Josh Withrow saying late last week that if central banks “have nothing to hide from the American people, they shouldn’t fear transparency.”

This story was updated at 7:45 p.m.