Congressman Rick Berg voted today in support of H.R. 459, the Federal Reserve Transparency Act. This bipartisan legislation, sponsored by Rep. Ron Paul (R-TX) and co-sponsored by Berg, will allow the Government Accountability Office (GAO) to conduct a thorough audit of the Federal Reserve.
"Americans deserve to have accountability and transparency from their government, especially when it comes to how the Federal Reserve manages our nation's monetary policy," stated Berg. "The Federal Reserve controls the international market value of the dollar, and they do so without any transparency. We need to open this process up so North Dakotans and all Americans can see how their money is being managed."
H.R. 459 calls for a one-time audit of the Fed by the GAO, including a report submitted to Congress, within 12 months of being enacted into law. Additional audits can also be performed without restrictions.
The Federal Reserve System, commonly known as the Fed, is the central banking system of the United States. It exists to conduct the nation's monetary policy, supervise and regulate banks and other financial institutions, and to provide financial services to depository institutions, the federal government, and foreign official institutions.
Unlike some other central banks, decisions made by the Fed do not have to be approved by the President or Congress. The Fed is also self-financing, and accordingly, it does not have to rely on funding approved by Congress to operate.
While the Fed is subject to some congressional oversight, including Government Accountability Office (GAO) audits, the Fed's most important actions and deliberations are not subject to audits or oversight, including most of the Fed's monetary policy actions or decisions. This includes: discount window lending, which is the process of providing direct loans to financial institutions; open-market operations; and dealings with foreign governments and other central banks.
In supporting this measure, Berg noted that the Fed's monetary policy decisions affect every single American, and therefore Congress has a responsibility to conduct oversight.
Since the 2008 financial crisis, the Fed has tripled its balance sheet to $3 trillion, which is equivalent to 20% of the economy through an unprecedented series of bailouts and economic interventions. Additionally, the Fed lent out nearly $16 trillion over the course of the financial crisis, which is more than the size of the entire economy.
H.R. 459 passed the House by a bipartisan vote of 327 to 98. It will now be sent to the Senate for consideration.