Today the House of Representatives is expected to vote on Rep. Ron Paul’s “audit the fed” bill, H.R. 459, the “Federal Reserve Transparency Act of 2011.” The transparency bill, which Paul (R-TX) first announced in 1983 and attracted exactly zero co-sponsors, now has 273 cosponsors, passed the House Oversight Committee unanimously and unaltered, and is poised for a vote on the House floor.
Retiring Texas Rep. Paul is the figure largely responsible for any movement toward increasing the transparency of the Federal Reserve System. Paul turned “End the Fed” into not only a campaign slogan, but also the source and motivation of increasing numbers of young libertarians dedicated to small and accountable government.
The transparency bill would eliminate many of the existing restrictions on Federal Reserve audits, including those on transactions with foreign banks and governments, deliberations over monetary policy, and communications between the entirely un-elected Federal Reserve board members.
“I’m feeling good about it,” Paul said in an interview with Politico. “I think we’re making progress, and the American people are very much aware of the interconnections of the Federal Reserve and the financial conditions of the country and the economic problems that we have.”
A limited audit conducted in 2011 by the Government Accountability Office (GAO)—and the first in the Fed’s history—revealed a web of conflicts in the operation of the Federal Reserve. Additionally, during the 2008 financial crisis, the Federal Reserve launched an unprecedented series of interventions and allocated more than $16 trillion to corporations and banks internationally for “financial assistance.” For a little perspective, the gross domestic product (GDP) of the United States is roughly $15.09 trillion. Thus, in just a few years, the Federal Reserve’s liabilities were worth more than the total annual economic activity within the United States.
Paul’s transparency bill, if it first passes a vote in the House and then full Congress, will be the first full audit of the Federal Reserve and an important initial step to bring much-needed transparency to the central bank.
First elected to Congress in 1976, the vote comes in the twilight of Paul’s decades-long political career.