Federal Reserve Transparency Act of 2017 (H.R. 24)
Federal Reserve Transparency Act of 2017 (H.R. 24)
Congressman Thomas Massie reintroduced H.R. 24, the Federal Reserve Transparency Act of 2017, also known as “Audit the Fed.” The bipartisan bill would require the Comptroller General to conduct a full examination of the Board of Governors of the Federal Reserve System and the Federal Reserve banks.
Those In Favor
H.R. 24 lifts unnecessary restrictions on Congressional access to information about the Federal Reserve, thereby restoring the ability of the Legislative Branch to conduct oversight of the central bank's exercise of its constitutionally delegated authority. The intent of this legislation is to allow Congress to make informed decisions about the Federal Reserve's use of the powers delegated to it by lawmakers by increasing the transparency and accountability of the Federal Reserve to Congress.
Rep. Thomas Massie (R-KY):
"The American public deserves more insight into the practices of the Federal Reserve,” Massie said. “Behind closed doors, the Fed crafts monetary policy that will continue to devalue our currency, slow economic growth, and make life harder for the poor and middle class.”
No institution holds more power over the future of the American economy and the value of our savings than the Federal Reserve, yet Fed Chair Yellen refuses to be fully accountable to the people’s representatives," said Senator Rand Paul (R-KY), who introduced companion legislation, S. 16, in the U.S. Senate. "The U.S. House has responded to the American people by passing Audit the Fed multiple times, and President-elect Trump has stated his support for an audit. Let’s send him the bill this Congress.”
Against the Measure
Rep. Elijah Cummings (D-MD):
"The United States Federal Reserve System is an independent central bank, and its monetary policy actions are not subject to approval by other entities. This independence is critical to the ability of the Board of Governors of the Federal Reserve to pursue monetary policies it considers most responsive to the nation's current economic conditions and most likely to fulfill its dual mandate of promoting maximum employment and stable prices.
H.R. 24 would significantly alter this balance by permanently repealing the provisions in 31 U.S.C. 714(b). GAO would be permitted to audit the Federal Reserve's transactions with foreign central banks and transactions conducted under the direction of the Federal Open Market Committee. GAO also would be able to audit the Federal Reserve's internal deliberations on monetary policy matters, as well as discussions or communications Members of the Board have with each other and with staff of the Federal Reserve System regarding monetary policy.
There is significant concern that opening the Federal Reserve's monetary policy deliberations to GAO audit in this way--including audits conducted without any significant elapse of time from the point of decision--could influence how such deliberations are conducted and potentially even the policies that are chosen, thus degrading the independence of the Federal Reserve.
If all restrictions on GAO's ability to audit the Federal Reserve's deliberative processes are removed, Members of Congress could actively seek to influence the Federal Reserve's deliberations by the types and subjects of audits they request of GAO. Members of Congress could also seek to obtain the materials GAO assesses when performing its audits, including documents related to the Federal Reserve's deliberations."
