Idaho First District Congressman Raúl Labrador today voted in favor of a bill that will require a full audit of the Board of Governors of the Federal Reserve System and the Federal Reserve banks by the Government Accountability Office (GAO). The Federal Reserve sets the nation's monetary policy, regulates and supervises banks, and is charged with maintaining general stability in the American financial system. Restrictions imposed by Congress on what information the legislative branch has access to have resulted in little or no transparency for the American people when it comes to the actions of the Federal Reserve.
"Monetary policy decisions must be made in an open and transparent manner without regard to special interest groups and political influence," Labrador said. "The Federal Reserve is officially an independent organization within the government. Decisions made by the Fed are not subject to approval by the president or Congress but the system is subject to congressional oversight. I believe it is our obligation and right to see what the Fed is up to with our nation's money supply, particularly in such fragile economic times as these."
Congressional interest in the actions of the Federal Reserve was piqued following the collapse of Lehman Brothers in 2008 and the subsequent financial crisis. Since then, the Federal Reserve's balance sheet has expanded. In June 2012, the Fed's balance sheet stood at $3 trillion, up from $900 billion prior to the fall of Lehman Brothers.
"As a member of the House Committee on Oversight and Government Reform, I am dedicated to ensuring accountability within all areas of the federal government," Labrador said. "Our economy and the Americans who drive it have a right to know what is going on behind the curtain when the Federal Reserve is in action. I'm proud to support this legislation and I'm confident that auditing the Federal Reserve will yield the transparency and accountability our nation deserves."
The bill today approved by the House was H.R. 459, introduced by Rep. Ron Paul (TX-14) and cosponsored by Labrador and 270 other representatives. The House approved the legislation in a vote of 327-98 and H.R. 459 now goes to the Senate for consideration.