A bipartisan bill requiring broader operational audits of the U.S. Federal Reserve passed the House on Wednesday by a broad bipartisan margin.
The bill passed 327 to 98; all but one Republican and 89 Democrats voted yes. The bill will be considered under the suspension of normal House rules, meaning it required at least a two-thirds majority to pass.
The measure would permit government auditors to conduct deeper audits of the Fed’s monetary policy operations. Despite opposition from some Democrats and the Federal Reserve, the bill has at least 274 cosponsors, including more than three dozen Democrats facing difficult reelection campaigns.
Wednesday’s vote was a coup for its chief sponsor, Rep. Ron Paul (R-Tex.), a longtime nemesis of the Fed, which he has called “an enormously destructive and unaccountable force in both the U.S. economy and the greater global economy.”
Lawmakers agreed to expanded audits of the Federal Reserve during negotiations over a financial regulatory reform measure in 2010. The agreement granted the Government Accountability Office broad authority to examine the operations of the Fed and to require additional disclosures from the central bank, including examinations of the Fed’s discount window and its purchases and sales of government securities.
At the time, Democrats and Republicans alike hailed the agreement as an effort to make the nation’s monetary policymaker a more transparent organization. But in years since, Paul and members of both parties said Congress deserves an opportunity to conduct deeper investigations of the Fed to better understand policy decisions.
House Democratic leaders oppose the bill, but said they don’t plan to whip the vote — or force most members to vote the party line. House Minority Whip Steny Hoyer (D-Md.) said Tuesday that the measure “increases the likelihood that the Fed will make decisions based on political rather than economic considerations, and that is not a recipe for sound monetary policy.”
For his part, Federal Reserve Chairman Ben Bernanke didn’t express explicit opposition to the bill, but said last week that the agency “needs to be transparent and it needs to be accountable.”
“We are quite transparent and accountable on monetary policy,” Bernanke told the House Financial Services Committee last week. “Besides our statement, besides our testimonies, we issue minutes after three weeks. We have quarterly projections, I give a press conference four times a year, there’s quite a bit of information provided to help Congress evaluate monetary policy as well as the public.”
Even with broad bipartisan support in the House, aides said the bill is unlikely to be considered in the Democratic-controlled Senate.