Blog: The federal bureaucracy has been described as the "fourth branch of government"

Statement

The federal bureaucracy has been described as the "fourth branch of government." Huge agencies, staffed by 4 million federal employees, make decisions every day that in previous eras would have required congressional action. The power of these agencies threatens a core principle of our democracy: popular sovereignty, or the idea that our government's authority comes from the consent of its citizens.

The Federal Reserve is a great example, and we took an important vote on this yesterday. Its decisions have enormous economic consequences, and those get made by a small, unelected group behind closed doors. The Federal Reserve Oversight Reform Act deals directly with these themes. The bill would give more representation to different parts of the country on the Federal Reserve's board (and less to New York), would add some transparency requirements to the Fed's decision-making process, and require the Fed to follow some rules intended to keep inflation under control. It would also require a yearly Government Accountability Office audit of the full scope of Fed operations -- something that's not being done now. Those measures are good steps towards making sure that executive agencies are accountable to the people they govern.

Past events show the need for more transparency. During the financial crisis in 2008, the federal government provided almost a trillion dollars in bailout money to large banks. The Federal Reserve was a lynchpin of that strategy, deciding to first bail out Bear Stearns, and then to allow Lehman Brothers to go bankrupt. A federal agency was disposing of multibillion-dollar companies with virtually no real congressional input. There's no way to go back and undo those decisions. But we can make sure that Congress, and by extension the people it represents, has enough information to make an informed decision about what executive agencies should be doing and how they should be operating.

The bill will cost $109 million over ten years -- because the oversight and reporting requirements in the bill would reduce the amount of money that the Federal Reserve returns to the Treasury. I weighed that cost against the need for more accountability, and reasoned that making this investment in transparency was worthwhile. I voted yes, and the bill passed 241 to 185.

Unfortunately its future is much less certain in the Senate.

Source