Fed Audit Deal Reached In Senate

A deal was struck in the Senate today regarding an audit of the Federal Reserve.

Senator Dodd worked out a compromise with Senator Sanders, and Dodd will now become a co-sponsor of the bill.

The White House has also apparently signed off on the legislation.

The bill would:

Require the non-partisan General Accountability Office to conduct an independent audit of the Board of Governors of the Federal Reserve System that does not interfere with monetary policy, to let the American people know the names of the recipients of over $2,000,000,000,000 in taxpayer assistance from the Federal Reserve System, and for other purposes.

And the bill provides:

Notwithstanding any other provision of law, the Board of Governors shall publish on its website, not later than December 1, 2010, with respect to all loans and other financial assistance it has provided during the period beginning on December 1, 2007 and ending on the date of enactment of this Act under the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Term Asset-Backed Securities Loan Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility, the Term Securities Lending Facility, the Term Auction Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the agency Mortgage-Backed Securities program, foreign currency liquidity swap lines, and any other program created as a result of the third undesignated paragraph of section 13 of the Federal Reserve Act.

As the Hill notes:

A Sanders aide said the bill would now include a “one-time” audit of the steps taken since 2007 to provide emergency lending to banks and other institutions. The Fed is required to post on its website by Dec. 1, 2010 the names of institutions that received aid from its emergency programs.

A summary of the amendment said it preserves statutory protections for Fed monetary policy. The Government Accountability Office (GAO) would also be required to audit the Fed’s governance structure.

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An aide to Sanders described the changes as “minor” but a senior GOP aide said Sanders had “gutted” his amendment to placate senior Obama administration officials.

Ron Paul - the original sponsor of the efforts to audit the Fed - writes:

Bernie Sanders has sold out and sided with Chris Dodd to gut Audit the Fed in the Senate. His “compromise” is what the Administration and banking interests want: they’ll allow the TARP and TALF to be audited, but no transparency of the FOMC, discount window operations or agreement with foreign central banks. We need to take action and stop this!

Here's the bill.