U.S. Representative Candice Miller (MI-10) today made the following comments in support of H.R.459, "Audit the Fed" bipartisan legislation which passed the House of Representatives. Currently, Congress has constitutional authority over the nation's money, which it has delegated to the Federal Reserve, but Congress is prohibited under current law from looking into how the Fed manages that delegated authority. The Fed's monetary policy decisions affect every single American, and therefore Congress has a responsibility to conduct oversight. Miller said:
"In America, we believe in freedom, in democracy, and in the belief that in this country the people rule. And in order for the people to rule responsibly they must have knowledge and information about the handling of our economy. Unfortunately, the American people are denied the basic information they need on one of the most important pillars of our economy, the Federal Reserve. Today, the Federal Reserve operates in secrecy. It creates money out of thin air, it can make purchases of questionable assets from friendly Wall Street firms, and it can loan hundreds of billions of dollars to foreign governments and central banks -- all out of the sight of the American people and even policy makers in Washington.
"This bill we passed today will allow for a thorough audit of the Fed including transactions with foreign governments, central banks, and the decision making process in setting monetary policy. We should never fear transparency in a free society -- it is vital -- and we should embrace it. I urge our colleagues in the Senate to join us in supporting this bill which provides for a long overdue audit of the Fed."
H.R.459 would allow U.S. Government Accountability Office (GAO) to conduct a full audit of the Fed
* H.R.459 would remove four restrictions on GAO audits of the Federal Reserve which pertain to monetary policy, allowing for a full audit of the Fed.
* Currently the GAO cannot audit:
1. Transactions for or with foreign central banks, governments, and international organizations (e.g. IMF).
2. Deliberations, decisions, or actions on monetary policy matters.
3. Transactions made under the direction of the Federal Open Market Committee.
4. Discussions or communications of the Fed related to 1-3.
H.R.459 would require a one-time audit within 12 months
* H.R.459 requires a one-time audit to be completed by GAO and a report submitted to Congress within 12 months of enactment.
* Additional audits can be performed in future without restrictions on what GAO can examine.
The Fed should be accountable to Congress
* Since the 2008 financial crisis, the Fed has tripled its balance sheet to $3 trillion, equivalent to 20% of the economy, through an unprecedented series of bailouts and economic interventions.
* The Fed lent out nearly $16 trillion over the course of the financial crisis--more than the size of the entire economy.