Congressman Tim Griffin (AR-02) issued the following statement after House passage of the Federal Reserve Transparency Act of 2011 (H.R. 459), which he cosponsored:
"With America's unemployment rate above 8 percent for 41 straight months and no economic recovery in sight, the Federal Reserve is reportedly considering another round of quantitative easing. Far-reaching decisions like these should be subject to public scrutiny, and the Fed should be accountable and transparent to Congress and the American people. This bill to audit the Fed will promote healthy financial markets and change the way Washington does business, and that's why it has my full support."
The Fed's Board of Governors and Federal Reserve District Banks are audited annually by the U.S. Government Accountability Office (GAO) the same way other federal banking agencies are audited. However, the Fed's monetary policy operations are excluded from the GAO's existing audit authority. H.R. 459 would require a one-time, complete audit of the Fed followed by a detailed report to Congress within 1 year of enactment. It also allows the GAO to conduct additional, future audits without restriction.
The Fed's policy-making committee meets next week, and The New York Times reported yesterday: "The Fed's chairman, Ben S. Bernanke, told Congress last week that the options under consideration include a new round of asset purchases, or "quantitative easing,' often described as QE3. As part of any such program, officials increasingly favor expanding the Fed's holdings of mortgage-backed securities for the first time since 2010."
Since the financial crisis of 2008, the Fed has tripled its balance sheet to $3 trillion, which is equal to 20 percent of the United States' economy.
Rep. Griffin became a cosponsor of H.R. 459 on April 6, 2011, shortly after beginning his first term in Congress.