Of course that fat fuck Barney Frank voted against it.
Nov. 19 (Bloomberg) -- A U.S. House committee advanced a proposal to remove a three-decade ban on congressional audits of Federal Reserve interest-rate decisions, a measure backed by a lawmaker who has called for the abolition of the central bank.
The House Financial Services Committee today, in a 43-26 vote and a second voice vote, attached the amendment for a broad audit of the Fed to legislation creating a council of regulators to monitor systemic risk. The proposal was offered by Representative Ron Paul, a Republican from Texas, and based on a bill with more than 300 co-sponsors.
Fed Chairman Ben S. Bernanke has opposed the Paul legislation, saying it may result in interference with monetary policy. The panel’s vote increases the possibility that Congress will reverse the ban on audits of interest-rate decisions. The broader bill on financial regulation is subject to a vote by the committee, then must be approved by the House and Senate and signed into law by President Barack Obama.
“It’s going to be seen as weakening the independence of monetary policy with consequent negative implications,” Barney Frank, the Massachusetts Democrat who chairs the committee, told reporters after the vote. “People are going to be worried about the impact on the dollar, on the interest rate.”
Frank, who opposed the Paul measure, said the issue “may be revisited” when the legislation reaches the House floor.
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This is the bill that would allow the people to win over the special interests,” Paul said during debate on the measures today. “There is no doubt that the individuals opposing this amendment represent the secrecy of the Federal Reserve.” An audit “shouldn’t hurt them in any way,” he said. Inflation Expectations
“Perception is very important in monetary policy,” Frank said. He said he was concerned that “inflationary expectations will be given a boost if we adopt the Paul” measure.
Michael Feroli, an economist for New York-based JPMorgan Chase & Co. and a former Fed researcher, said the central bank “should do whatever it takes to stop this from going forward and eroding confidence in the Fed’s independence.”
“It’s probably not going to be helpful in terms of keeping inflation expectations low and supporting the dollar,” said Feroli.
The Fed’s powers and rate-setting independence are under threat on several fronts in Congress. Separately today, the Senate Banking Committee began debate on legislation that would strip the Fed of bank-supervision powers and give lawmakers greater say in naming the officials who vote on monetary policy.
