Ros-Lehtinen Co-Sponsors Bill That Would Audit The Federal Reserve
Congresswoman Ileana Ros-Lehtinen, a senior member of the Florida Congressional Delegation, is pleased to have cosponsored legislation that would audit the Federal Reserve. The legislation "Federal Reserve Transparency Act" directs the Comptroller General to complete before the end of 2010 an audit of the Federal Reserve System and of the Federal Reserve banks followed by a detailed report to Congress. As of today, 245 members of the House have also agreed to co-sponsor this important bill.
Over the last year, the Federal Reserve has taken on the major role in dealing with our nation's unusual and overwhelming financial situation. For the first time in over 50 years, the Federal Reserve expanded its lending to non-bank financial firms. As a result of the Fed's new lending its balance sheet increased significantly, from $874 billion on August 1, 2007, a date shortly before the financial system first experienced turmoil, to $2.312 billion at its peak on December 17, 2008, an increase of over 165%.
Among this new lending was the Fed's $29 billion loan to have JP Morgan buy the assets of Bear Stearns; a $120 billion bailout of the American Insurance Group; a guarantee of $306 billion in assets of Citigroup; and a similar guarantee on $118 billion in Bank of America assets. In all of these agreements, the Fed and the American taxpayer has been exposed to a greatly increased financial risk if the assets purchased or guaranteed fall in value.
This incredible $1.5 trillion increase in lending by the Federal Reserve is backed by us the American taxpayer. This huge amount of spending gives the Fed, an unelected appointed institution, a tremendous amount of power to influence our families, jobs and financial security far beyond what most had ever thought possible. With this power must come more responsibility, accountability and transparency by the Fed to every taxpaying American.
Said Ros-Lehtinen, "If the Fed is going to print over one trillion dollars that the US taxpayer can't afford, I think we have a right to know exactly who they are giving this money to and how much they are giving them. It's time for the Fed to open up its books to an independent audit conducted by Congress's budget watchdog, the Comptroller General."