Federal Reserve Transparency Act
Encyclopedia
The Federal Reserve Transparency Act of 2009 was a bill introduced in the U.S. House of Representatives
of the 111th United States Congress
by Congressman
Ron Paul
(TX-14
). It proposed a reformed audit
of the Federal Reserve System
(the "Fed") before the end of 2010. The bill had 319 cosponsors, and was referred to the Committee on Financial Services
. Its Senate version, introduced by Senator Bernie Sanders
(Ind.-VT
), was called the Federal Reserve Sunshine Act of 2009 , and it had 32 cosponsors. A related bill used the same two names in reverse order. An amendment with similar provisions was added to the Federal Stability Improvement Act by the House Committee on Financial Services in November 2009.
The bill was reintroduced in the House by Ron Paul, and in the Senate by his son Rand Paul
, during the 112th United States Congress
as and . As of December 1st, 2011, the House bill has 194 cosponsors and the Senate bill has 19 cosponsors.
of the United States Code
"to reform the manner in which the Board of Governors
of the Federal Reserve System is audited by the Comptroller General of the United States
and the manner in which such audits are reported". It strikes exceptions to the audit protocol in for the Federal Reserve System
, the central bank
of the United States
, and replaces an indefinite deadline with a deadline of December 2010. It also ensures the audit results are available to Congress. The audit would include the Fed's "discount window
", its funding facilities, its open market operations, and its agreements with foreign bankers.
Proponents state that the Fed has never been audited by Congress since the Fed's creation in 1913. The Federal Reserve states that "the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor." The
bill's sponsor, Congressman Ron Paul (R
-TX
), counters by stating that the present audit process exempts the Fed's "most crucial activities".
(D
-HI
), Michele Bachmann
(R
-MN
), Roscoe Bartlett
(R
-MD
), Paul Broun
(R
-GA
), Dan Burton
(R
-IN
), Walter B. Jones
(R
-NC
), Steve Kagen
(D
-WI
), Ted Poe
(R
-TX
), Bill Posey
(R
-FL
), Denny Rehberg
(R
-MT
), and Lynn Woolsey
(D
-CA
).
He immediately promoted the bill at the annual Conservative Political Action Conference
(CPAC) on February 27. Paul charges the Federal Open Market Committee
with being "less than transparent" with its secret meetings. In an April 2009 editorial, Paul thanked the Fed for its responsive attempt to enhance transparency and accountability, but called it "window dressing at best, and it's utterly useless at worst".
(D
-OH
) became the 218th sponsor as listed at THOMAS.gov on June 11; 218 votes are needed to pass any bill in the House, and 290 were needed for a veto-proof majority
. Barney Frank
(D-MA), Chairman of the House Committee on Financial Services through which the bill must pass, finally endorsed the bill in August following months of silence. Frank later reversed his position on the bill after the Watt amendment was rejected and Watt's revisions undone by an amendment co-sponsored by Paul and Alan Grayson
(D-FL
).
, Treasury Secretary
Tim Geithner and others from the Obama administration.
Frank declined to vote for the final amendment after proposed changes made by fellow Democrat Melvin Watt representing North Carolina's 12th congressional district
, which encompasses most of Bank of America
hometown Charlotte
, were stripped out in favor of the amendment's original language by the amendment proposed by Paul and Grayson. Watt's proposed version included provisions that allowed audits of the Fed's balance sheet, but not for the monetary policy. Ryan Grim, a contributor for the left-leaning news blog The Huffington Post
suggested Watt's amendment was an attempt to create less transparency than before at the Federal Reserve.
(I
-VT
) introduced the Senate companion version, , the Federal Reserve Sunshine Act of 2009, with the same provisions; this version was then referred to the Committee on Banking, Housing, and Urban Affairs
. The bill currently has 32 co-sponsors.
attempted to amend HR 2918, the Legislative Branch Appropriations Act by adding the entire text of as Senate Amendment 1367. However, U.S. Senator Ben Nelson
stopped the amendment by claiming it violated Senate Rule 16, by "legislating" on an appropriations bill. The Senate president agreed, but when challenged by DeMint, admitted that many other GAO audits in the bill also violated Rule 16, but took no action. The bill passed without further changes.
had told Sanders that publishing the names would make the banks feel stigmatized and potentially reluctant to borrow further.
Senator Judd Gregg
called the Paul-Grayson amendment "pandering
to populism
", saying the audit requirements would be detrimental to monetary policy. Gregg added that "It's great PR; you go home and beat up the Fed."
program which broadcast April 15 from a rally at the Alamo in San Antonio, Pat Gray
interviewed a local supporter of the Transparency Act, drawing cheers from the crowd.
Support for the bill has also come from those on the left outside of congress. In a letter to Chairman Barney Frank of the House Financial Services Committee, Ranking Member Spencer Bachus and its members, several progressives such as bloggers Jane Hamsher
of Firedoglake, Yves Smith of Naked Capitalism, "Tyler Durden" of Zero Hedge
, author Naomi Klein
, labor leaders President Richard Trumka
of the AFL-CIO
, the SEIU's President Andy Stern
, the United Steelworkers
's President Leo Gerard
, economists Dean Baker
, James K. Galbraith
, Rob Johnson, and professors William K. Black
, Thomas Ferguson
, and L. Randall Wray, pushed for passage of the bill and against the adoption of the amendment proposed by Rep. Watt.
The advocacy group Campaign for Liberty (CFL) encourages members to petition representatives to cosponsor the Transparency Act. College Republicans at Appalachian State University
, led by journalism major and CFL member Tim B. Reaves, staged a Boston Tea Party
themed assembly for tax day 2009, to raise awareness for the Transparency Act; the event included wearing white wristbands to symbolize slavery
and mailing tea bags to state representatives. CFL president John Tate promotes the bill in conjunction with dealing with "the silent, destructive tax of monetary inflation", this thought was echoed in the Kansas City Star. Ed Hipps, the CFL Philadelphia regional coordinator, also advocated for the bill at a local tax-day rally. Ron Paul, Andrew Napolitano
, and state representative Jim Guest
promoted the bill "at length" at the crowded first CFL regional conference in St. Louis, Missouri
(March 27–29), affirming Americans' "right to know where their tax dollars are going, especially those going to companies from the stimulus package". Pro-gambling group Gambling911.com is also interested in the Transparency Act, as an opportunity to audit the Federal Reserve, and also promoted the CFL "Freedom Celebration" regional conference.
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
of the 111th United States Congress
111th United States Congress
The One Hundred Eleventh United States Congress was the meeting of the legislative branch of the United States federal government from January 3, 2009 until January 3, 2011. It began during the last two weeks of the George W. Bush administration, with the remainder spanning the first two years of...
by Congressman
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
Ron Paul
Ron Paul
Ronald Ernest "Ron" Paul is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the 2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes...
(TX-14
Texas's 14th congressional district
Texas's 14th district for the United States House of Representatives is a Congressional district that covers the area south and southwest of the Greater Houston region, including Galveston, in the state of Texas. The district was created as a result of the 1900 U.S. Census and was first contested...
). It proposed a reformed audit
Audit
The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.- Accounting...
of the Federal Reserve System
Federal Reserve System
The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...
(the "Fed") before the end of 2010. The bill had 319 cosponsors, and was referred to the Committee on Financial Services
United States House Committee on Financial Services
The United States House Committee on Financial Services is the committee of the United States House of Representatives that oversees the entire financial services industry, including the securities, insurance, banking, and housing industries...
. Its Senate version, introduced by Senator Bernie Sanders
Bernie Sanders
Bernard "Bernie" Sanders is the junior United States Senator from Vermont. He previously represented Vermont's at-large district in the United States House of Representatives...
(Ind.-VT
Vermont
Vermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...
), was called the Federal Reserve Sunshine Act of 2009 , and it had 32 cosponsors. A related bill used the same two names in reverse order. An amendment with similar provisions was added to the Federal Stability Improvement Act by the House Committee on Financial Services in November 2009.
The bill was reintroduced in the House by Ron Paul, and in the Senate by his son Rand Paul
Rand Paul
Randal Howard "Rand" Paul is the junior United States Senator for Kentucky. He is a member of the Republican Party. A member of the Tea Party movement, he describes himself as a "constitutional conservative" and a libertarian...
, during the 112th United States Congress
112th United States Congress
The One Hundred Twelfth United States Congress is the current meeting of the legislative branch of the United States federal government, composed of the United States Senate and the United States House of Representatives. It convened in Washington, D.C. on January 3, 2011, and will end on January...
as and . As of December 1st, 2011, the House bill has 194 cosponsors and the Senate bill has 19 cosponsors.
Purpose
According to its short title, the Federal Reserve Transparency Act of 2009 amends Title 31Title 31 of the United States Code
Title 31 of the United States Code outlines the role of the money and finance in the United States Code.* Subtitle I—General* Subtitle II—The Budget Process* Subtitle III—Financial Management* Subtitle IV—Money** — Sacagawea dollar...
of the United States Code
United States Code
The Code of Laws of the United States of America is a compilation and codification of the general and permanent federal laws of the United States...
"to reform the manner in which the Board of Governors
Board of governors
Board of governors is a term sometimes applied to the board of directors of a public entity or non-profit organization.Many public institutions, such as public universities, are government-owned corporations. The British Broadcasting Corporation was managed by a board of governors, though this role...
of the Federal Reserve System is audited by the Comptroller General of the United States
Comptroller General of the United States
The Comptroller General of the United States is the director of the Government Accountability Office , a legislative branch agency established by Congress in 1921 to ensure the fiscal and managerial accountability of the federal government...
and the manner in which such audits are reported". It strikes exceptions to the audit protocol in for the Federal Reserve System
Federal Reserve System
The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...
, the central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, and replaces an indefinite deadline with a deadline of December 2010. It also ensures the audit results are available to Congress. The audit would include the Fed's "discount window
Discount window
The discount window is an instrument of monetary policy that allows eligible institutions to borrow money from the central bank, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions...
", its funding facilities, its open market operations, and its agreements with foreign bankers.
Proponents state that the Fed has never been audited by Congress since the Fed's creation in 1913. The Federal Reserve states that "the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor." The
bill's sponsor, Congressman Ron Paul (R
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
-TX
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
), counters by stating that the present audit process exempts the Fed's "most crucial activities".
House
Representative Paul introduced the bill to the U.S. House of Representatives of the 111th Congress on February 26, 2009, at which point it was referred to the Committee on Financial Services. Its 11 original cosponsors were Neil AbercrombieNeil Abercrombie
Neil Abercrombie is the 7th and current Governor of Hawaii. He was the Democratic U.S. Representative of the First Congressional District of Hawaii which comprises urban Honolulu. He served in Congress from 1986 to 1987 and from 1991 to 2010 when he resigned to successfully run for governor...
(D
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
-HI
Hawaii
Hawaii is the newest of the 50 U.S. states , and is the only U.S. state made up entirely of islands. It is the northernmost island group in Polynesia, occupying most of an archipelago in the central Pacific Ocean, southwest of the continental United States, southeast of Japan, and northeast of...
), Michele Bachmann
Michele Bachmann
Michele Marie Bachmann is a Republican member of the United States House of Representatives, representing , a post she has held since 2007. The district includes several of the northern suburbs of the Twin Cities, such as Woodbury, and Blaine as well as Stillwater and St. Cloud.She is currently a...
(R
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
-MN
Minnesota
Minnesota is a U.S. state located in the Midwestern United States. The twelfth largest state of the U.S., it is the twenty-first most populous, with 5.3 million residents. Minnesota was carved out of the eastern half of the Minnesota Territory and admitted to the Union as the thirty-second state...
), Roscoe Bartlett
Roscoe Bartlett
Roscoe Gardner Bartlett, Ph.D. is the U.S. Representative for , serving since 1993. He is a member of the Republican Party, and a member of the Tea Party Caucus...
(R
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
-MD
Maryland
Maryland is a U.S. state located in the Mid Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east...
), Paul Broun
Paul Broun
Paul Collins Broun, Jr. is the U.S. Representative for , serving since 2007. He is a member of the Republican Party and the Tea Party Caucus.-Early life, education and career:...
(R
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
-GA
Georgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...
), Dan Burton
Dan Burton
Danny "Dan" Lee Burton is the U.S. Representative for , and previously the , serving since 1983. He is a member of the Republican Party....
(R
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
-IN
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...
), Walter B. Jones
Walter B. Jones
Walter Beaman Jones, Jr. is the U.S. Representative for , serving since 1995. He is a member of the Republican Party. The district encompasses the Outer Banks and areas near the Pamlico Sound. Jones' father was Walter B. Jones, Sr., a Democratic Party congressman from the neighboring 1st district...
(R
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
-NC
North Carolina
North Carolina is a state located in the southeastern United States. The state borders South Carolina and Georgia to the south, Tennessee to the west and Virginia to the north. North Carolina contains 100 counties. Its capital is Raleigh, and its largest city is Charlotte...
), Steve Kagen
Steve Kagen
Steven Leslie Kagen, M.D. is a physician and was the U.S. Representative for , serving from 2007 to 2011. He is a member of the Democratic Party...
(D
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
-WI
Wisconsin
Wisconsin is a U.S. state located in the north-central United States and is part of the Midwest. It is bordered by Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michigan to the northeast, and Lake Superior to the north. Wisconsin's capital is...
), Ted Poe
Ted Poe
Lloyd "Ted" Poe is a Republican politician currently representing Texas's 2nd congressional district in the United States House of Representatives. The district includes most of northern Houston, as well as most of the Beaumont-Port Arthur metropolitan area. He is the first Republican to ever...
(R
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
-TX
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
), Bill Posey
Bill Posey
William "Bill" Posey is the U.S. Representative for , serving since 2009. He is a member of the Republican Party. He formerly served in the Florida Senate and the Florida House of Representatives....
(R
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
-FL
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
), Denny Rehberg
Denny Rehberg
Dennis R. "Denny" Rehberg is the U.S. Representative for , serving since 2001. He is a member of the Republican Party.-Early life, education and career:...
(R
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
-MT
Montana
Montana is a state in the Western United States. The western third of Montana contains numerous mountain ranges. Smaller, "island ranges" are found in the central third of the state, for a total of 77 named ranges of the Rocky Mountains. This geographical fact is reflected in the state's name,...
), and Lynn Woolsey
Lynn Woolsey
Lynn C. Woolsey is the U.S. Representative for , serving since 1993. She is a member of the Democratic Party. The district includes all of Marin County and most of Sonoma County. She is a member of the Congressional Progressive Caucus, and its co-chair...
(D
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
-CA
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
).
He immediately promoted the bill at the annual Conservative Political Action Conference
Conservative Political Action Conference
The Conservative Political Action Conference is an annual political conference attended by conservative activists and elected officials from across the United States....
(CPAC) on February 27. Paul charges the Federal Open Market Committee
Federal Open Market Committee
The Federal Open Market Committee , a committee within the Federal Reserve System, is charged under United States law with overseeing the nation's open market operations . It is the Federal Reserve committee that makes key decisions about interest rates and the growth of the United States money...
with being "less than transparent" with its secret meetings. In an April 2009 editorial, Paul thanked the Fed for its responsive attempt to enhance transparency and accountability, but called it "window dressing at best, and it's utterly useless at worst".
Progress
As the 111th Congress drew to its close in December 2010, had 320 cosponsors, including all House Republicans, as well as over 100 Democrats, suggesting broad bipartisan support. Dennis KucinichDennis Kucinich
Dennis John Kucinich is the U.S. Representative for , serving since 1997. He was furthermore a candidate for the Democratic nomination for President of the United States in the 2004 and 2008 presidential elections....
(D
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
-OH
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
) became the 218th sponsor as listed at THOMAS.gov on June 11; 218 votes are needed to pass any bill in the House, and 290 were needed for a veto-proof majority
Veto override
A veto override is an action by legislators and decision-makers to override an act of veto by someone with such powers - thus forcing through a new decision. The power to override a veto varies greatly in tandem with the veto power itself. The U.S constitution gives a 2/3 majority Congress the...
. Barney Frank
Barney Frank
Barney Frank is the U.S. Representative for . A member of the Democratic Party, he is the former chairman of the House Financial Services Committee and is considered the most prominent gay politician in the United States.Born and raised in New Jersey, Frank graduated from Harvard College and...
(D-MA), Chairman of the House Committee on Financial Services through which the bill must pass, finally endorsed the bill in August following months of silence. Frank later reversed his position on the bill after the Watt amendment was rejected and Watt's revisions undone by an amendment co-sponsored by Paul and Alan Grayson
Alan Grayson
Alan Mark Grayson is a former U.S. Representative for , serving from 2009 until 2011. He is a member of the Democratic Party and loves cookies. After losing the election he moved to Austin to start stand-up comedy and a cookie business. The district Grayson represented lies in central Florida...
(D-FL
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
).
Amendment to Financial Stability Improvement Act of 2009 (HR 3996)
On November 19, 2009, the Committee on Financial Services approved the Paul-Grayson amendment to the Financial Stability Improvement Act of 2009 . The amendment includes many provisions of the Federal Reserve Transparency Act, including removing GAO audit restrictions and allowing a more complete audit of the Federal Reserve, including reviewing various policies and agreements with foreign entities. It was passed by in a 43-26 vote, with bipartisan support despite opposition from former supporter and Committee Chairman Barney Frank. The amendment was also opposed by Federal Reserve Chairman Ben BernankeBen Bernanke
Ben Shalom Bernanke is an American economist, and the current Chairman of the Federal Reserve, the central bank of the United States. During his tenure as Chairman, Bernanke has overseen the response of the Federal Reserve to late-2000s financial crisis....
, Treasury Secretary
United States Secretary of the Treasury
The Secretary of the Treasury of the United States is the head of the United States Department of the Treasury, which is concerned with financial and monetary matters, and, until 2003, also with some issues of national security and defense. This position in the Federal Government of the United...
Tim Geithner and others from the Obama administration.
Frank declined to vote for the final amendment after proposed changes made by fellow Democrat Melvin Watt representing North Carolina's 12th congressional district
North Carolina's 12th congressional district
North Carolina's 12th congressional district is located in central North Carolina and comprises portions of Charlotte, Winston-Salem, Greensboro, Lexington, Salisbury, Concord, and High Point...
, which encompasses most of Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
hometown Charlotte
Charlotte, North Carolina
Charlotte is the largest city in the U.S. state of North Carolina and the seat of Mecklenburg County. In 2010, Charlotte's population according to the US Census Bureau was 731,424, making it the 17th largest city in the United States based on population. The Charlotte metropolitan area had a 2009...
, were stripped out in favor of the amendment's original language by the amendment proposed by Paul and Grayson. Watt's proposed version included provisions that allowed audits of the Fed's balance sheet, but not for the monetary policy. Ryan Grim, a contributor for the left-leaning news blog The Huffington Post
The Huffington Post
The Huffington Post is an American news website and content-aggregating blog founded by Arianna Huffington, Kenneth Lerer, and Jonah Peretti, featuring liberal minded columnists and various news sources. The site offers coverage of politics, theology, media, business, entertainment, living, style,...
suggested Watt's amendment was an attempt to create less transparency than before at the Federal Reserve.
Passage by the House
The Financial Stability Improvement Act was combined, along with several other bills from the same committee, into The Wall Street Reform and Consumer Protection Act of 2009 - Financial Stability Improvement Act of 2009 . The House passed the new bill on December 11, 2009 on a vote of 223-202. The vote was mostly along party lines, with no Republicans voting for the bill. Paul, objecting to some of the provisions of the combined bill, voted against passage despite the inclusion of the audit provisions he had been proposing for years.Senate
On March 16, 2009, U.S. Senator Bernie SandersBernie Sanders
Bernard "Bernie" Sanders is the junior United States Senator from Vermont. He previously represented Vermont's at-large district in the United States House of Representatives...
(I
Independent (politician)
In politics, an independent or non-party politician is an individual not affiliated to any political party. Independents may hold a centrist viewpoint between those of major political parties, a viewpoint more extreme than any major party, or they may have a viewpoint based on issues that they do...
-VT
Vermont
Vermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...
) introduced the Senate companion version, , the Federal Reserve Sunshine Act of 2009, with the same provisions; this version was then referred to the Committee on Banking, Housing, and Urban Affairs
United States Senate Committee on Banking, Housing, and Urban Affairs
The United States Senate Committee on Banking, Housing, and Urban Affairs has jurisdiction over matters related to: banks and banking, price controls, deposit insurance, export promotion and controls, federal monetary policy, financial aid to commerce and industry, issuance of redemption of notes,...
. The bill currently has 32 co-sponsors.
Senate Amendment 1367
On July 6, 2009, U.S. Senator Jim DeMintJim DeMint
James Warren "Jim" DeMint is the junior U.S. Senator from South Carolina, serving since 2005. He is a member of the Republican Party and a leader in the Tea Party movement. He previously served as the U.S. Representative for from 1999 to 2005.-Early life and education:DeMint was born in...
attempted to amend HR 2918, the Legislative Branch Appropriations Act by adding the entire text of as Senate Amendment 1367. However, U.S. Senator Ben Nelson
Ben Nelson
Earl Benjamin "Ben" Nelson is the senior U.S. Senator from Nebraska. He is a member of the Democratic Party and was elected to the U.S. Senate in 2000....
stopped the amendment by claiming it violated Senate Rule 16, by "legislating" on an appropriations bill. The Senate president agreed, but when challenged by DeMint, admitted that many other GAO audits in the bill also violated Rule 16, but took no action. The bill passed without further changes.
Related legislation
The two titles for these two versions of the bill are not to be confused with the same two titles (used in reverse) for the two versions of a related bill. The House "Federal Reserve Sunshine Act of 2009" by Paul , and the Senate "Federal Reserve Transparency Act of 2009" by Sanders , require the Federal Reserve to publish information on financial assistance provided to various entities during the 2008 Bailout. This bill creates a website listing all banks that have borrowed from the Fed since March 24, 2008, and the amount, terms, and "specific rationale" of the loans. Sanders commented, "I have a hard time understanding how you have put $2.2 trillion at risk without making those names available." Fed chair Ben BernankeBen Bernanke
Ben Shalom Bernanke is an American economist, and the current Chairman of the Federal Reserve, the central bank of the United States. During his tenure as Chairman, Bernanke has overseen the response of the Federal Reserve to late-2000s financial crisis....
had told Sanders that publishing the names would make the banks feel stigmatized and potentially reluctant to borrow further.
Reception
The Centro Studi Monetari says a similar audit law is desired in Italy to publish the budgets of banks like Bankitalia.Senator Judd Gregg
Judd Gregg
Judd Alan Gregg is a former Governor of New Hampshire and former United States Senator from New Hampshire, who served as chairman of the Senate Budget Committee. He is a member of the Republican Party and was a businessman and attorney in Nashua before entering politics...
called the Paul-Grayson amendment "pandering
Pandering (politics)
Pandering is the act of expressing one's views in accordance with the likes of a group to which one is attempting to appeal. The term is most notably associated with politics...
to populism
Populism
Populism can be defined as an ideology, political philosophy, or type of discourse. Generally, a common theme compares "the people" against "the elite", and urges social and political system changes. It can also be defined as a rhetorical style employed by members of various political or social...
", saying the audit requirements would be detrimental to monetary policy. Gregg added that "It's great PR; you go home and beat up the Fed."
Advocacy
Support for the Federal Reserve Transparency Act of 2009 was one of the issues raised as part of the nationwide 2009 Tea Party protests. During an episode of the Glenn BeckGlenn Beck (TV program)
Glenn Beck is a United States cable news show hosted by Glenn Beck that aired weekdays on Fox News Channel. The program, originally on CNN Headline News , premiered on FNC on January 19, 2009 and aired weekdays at 5:00 PM EST...
program which broadcast April 15 from a rally at the Alamo in San Antonio, Pat Gray
Pat Gray
Pat Gray is an American talk radio host. He is a co-host of The Glenn Beck Program, a nationally syndicated radio talk show featuring host Glenn Beck. Gray was formerly the host of the morning show on radio station KSEV.-History:...
interviewed a local supporter of the Transparency Act, drawing cheers from the crowd.
Support for the bill has also come from those on the left outside of congress. In a letter to Chairman Barney Frank of the House Financial Services Committee, Ranking Member Spencer Bachus and its members, several progressives such as bloggers Jane Hamsher
Jane Hamsher
Jane Hamsher is a US film producer, author, and blogger best known as the author of Killer Instinct, a memoir about co-producing the 1994 movie Natural Born Killers with Don Murphy and others, and as the founder and publisher of the politically progressive blog FireDogLake...
of Firedoglake, Yves Smith of Naked Capitalism, "Tyler Durden" of Zero Hedge
Zero Hedge
Zero Hedge is an American financial blog. It reports on Wall Street and the financial sector and is credited with bringing the controversial practice of flash trading to public attention in 2009 via a series of posts alleging that Goldman Sachs' access to flash order information allowed the firm to...
, author Naomi Klein
Naomi Klein
Naomi Klein is a Canadian author and social activist known for her political analyses and criticism of corporate globalization.-Family:...
, labor leaders President Richard Trumka
Richard Trumka
Richard Louis Trumka is an organized labor leader in the United States. He was elected President of the AFL-CIO on September 16, 2009, at the labor federation's convention in Pittsburgh, Pennsylvania. He served as the Secretary-Treasurer of the AFL-CIO, from 1995 to 2009, and prior to that was...
of the AFL-CIO
AFL-CIO
The American Federation of Labor and Congress of Industrial Organizations, commonly AFL–CIO, is a national trade union center, the largest federation of unions in the United States, made up of 56 national and international unions, together representing more than 11 million workers...
, the SEIU's President Andy Stern
Andy Stern
Andrew L. "Andy" Stern , is the former president of the 2.2 million-member Service Employees International Union , the fastest-growing union in the Americas. SEIU is the second largest union in the United States and Canada after the National Education Association.Stern was elected in 1996 to...
, the United Steelworkers
United Steelworkers
The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union is the largest industrial labor union in North America, with 705,000 members. Headquartered in Pittsburgh, U.S., the United Steelworkers represents workers in the United...
's President Leo Gerard
Leo Gerard
Leo W. Gerard is a steelworker and a Canadian and American labor leader. He was elected president of the United Steelworkers in 2001, and is the second Canadian to head the union. He is also a vice president of the AFL-CIO....
, economists Dean Baker
Dean Baker
Dean Baker is an American macroeconomist and co-founder of the Center for Economic and Policy Research, with Mark Weisbrot. He previously was a senior economist at the Economic Policy Institute and an assistant professor of economics at Bucknell University. He has a Ph.D...
, James K. Galbraith
James K. Galbraith
James Kenneth Galbraith is an American economist who writes frequently for mainstream and liberal publications on economic topics. He is currently a professor at the Lyndon B. Johnson School of Public Affairs and at the Department of Government, University of Texas at Austin. He is also a Senior...
, Rob Johnson, and professors William K. Black
William K. Black
William Kurt Black is an American lawyer, academic, author, and a former bank regulator. Black's expertise is in white-collar crime, public finance, regulation, and other topics in law and economics...
, Thomas Ferguson
Thomas Ferguson (academic)
Thomas Ferguson is an American political scientist and author who studies and writes on politics and economics, often within a historical perspective. He is a political science professor at the University of Massachusetts Boston and a member of the advisory board for George Soros' Institute for...
, and L. Randall Wray, pushed for passage of the bill and against the adoption of the amendment proposed by Rep. Watt.
The advocacy group Campaign for Liberty (CFL) encourages members to petition representatives to cosponsor the Transparency Act. College Republicans at Appalachian State University
Appalachian State University
Appalachian State University is a comprehensive , public, coeducational university located in Boone, North Carolina, United States. Appalachian State, also referred to as Appalachian, App State, or simply App, is the sixth largest institution in the University of North Carolina system...
, led by journalism major and CFL member Tim B. Reaves, staged a Boston Tea Party
Boston Tea Party
The Boston Tea Party was a direct action by colonists in Boston, a town in the British colony of Massachusetts, against the British government and the monopolistic East India Company that controlled all the tea imported into the colonies...
themed assembly for tax day 2009, to raise awareness for the Transparency Act; the event included wearing white wristbands to symbolize slavery
Slavery
Slavery is a system under which people are treated as property to be bought and sold, and are forced to work. Slaves can be held against their will from the time of their capture, purchase or birth, and deprived of the right to leave, to refuse to work, or to demand compensation...
and mailing tea bags to state representatives. CFL president John Tate promotes the bill in conjunction with dealing with "the silent, destructive tax of monetary inflation", this thought was echoed in the Kansas City Star. Ed Hipps, the CFL Philadelphia regional coordinator, also advocated for the bill at a local tax-day rally. Ron Paul, Andrew Napolitano
Andrew Napolitano
Andrew Paolo Napolitano is a former New Jersey Superior Court Judge and now a political and legal analyst for Fox News Channel. Napolitano started on the channel in 1998, and currently serves as the network's senior judicial analyst, commenting on legal news and trials...
, and state representative Jim Guest
Jim Guest
Jim Guest is a former aerospace engineer, and current farmer, small business owner, and former Republican member of the Missouri House of Representatives from District 5. Founder of L.A.R.I...
promoted the bill "at length" at the crowded first CFL regional conference in St. Louis, Missouri
St. Louis, Missouri
St. Louis is an independent city on the eastern border of Missouri, United States. With a population of 319,294, it was the 58th-largest U.S. city at the 2010 U.S. Census. The Greater St...
(March 27–29), affirming Americans' "right to know where their tax dollars are going, especially those going to companies from the stimulus package". Pro-gambling group Gambling911.com is also interested in the Transparency Act, as an opportunity to audit the Federal Reserve, and also promoted the CFL "Freedom Celebration" regional conference.
See also
- Federal Reserve Board Abolition Act
- Free Competition in Currency Act
External links
- Audit The Fed - Trans-partisan coalition formed to promoted HR1207/S604.
- H.R. 1207:Federal Reserve Transparency Act of 2009, Govtrack.us