Although it has controlled the nation's monetary policy for nearly 100 years, the Federal Reserve has never been subject to a comprehensive audit because the bulk of its operations are exempt from such scrutiny.
To increase transparency on the nation's central bank, Congressman Jack Kingston joined a bipartisan majority in voting to remove existing audit restrictions and require a full audit within one year.
"The Constitution endows on Congress the authority to create a currency and regulate its value," said Kingston. "How then does it make sense that Congress, and thereby the American people, does not have the power to oversee its constitutionally-mandated authority? We deserve to know what the Fed does with taxpayer dollars and how it makes decisions that impact our lives every day."
Under current law, the citizen watchdog Government Accountability Office has severely limited authority to examine the actions of the Federal Reserve System. It is unable to review its monetary policy operations, emergency lending, operations with foreign central banks and international organizations, or any communications or deliberations related to such actions.
The Government Accountability Office testified before Congress that it, "[does] not see how [it] can satisfactorily audit the Federal Reserve System without authority to examine the largest single category of financial transactions and assets that it has."
That fact has many members like Kingston, who is a leading cosponsor of the effort to audit the Fed, very concerned.
"Over the course of this financial crisis, the Fed lent nearly $16 trillion," Kingston said. "That's bigger than the size of the entire American economy. The American people deserve a full accounting of those actions."
The bill passed the House by a vote of 327-98. It must now be passed by the Senate before being sent to the President to be signed into law.