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Rand Paul: Audit the Fed or I will hold up nominees

Published time: May 13, 2014 21:20
Senator Rand Paul (R-KY) (Reuters / Lucas Jackson)

Senator Rand Paul (R-KY) (Reuters / Lucas Jackson)

United States Senator Rand Paul (R-Kentucky) says he plans to hold the appointment of three new likely members of the US Federal Reserve unless colleagues in Congress hold a vote on auditing the Fed.

A long-time opponent of the central bank, Paul wrote Senate Majority Leader Harry Reid (D-Nevada) informing him of his plans to stall the nomination process for the new Fed members unless a bill of his brought up for a vote.

“As the Senate debates the Federal Reserve Board nominees, there is no more appropriate time to provide Congress with additional oversight and scrutiny of the actions and decisions of the central banks,” Paul wrote Reid. “Therefore, I request that my bipartisan legislation, S. 209, the Federal Reserve Transparency Act, be scheduled for an up or down vote concurrently with nominees to the Federal Reserve Board of Governors.”

Introduced in February 2013, that bill, if approved, would require a full audit of the Fed’s Board of Governors and the entire central banking system.

"The Fed's operations under a cloak of secrecy have gone on too long and the American people have a right to know what the Federal Reserve is doing with our nation's money supply," Paul said when he proposed it last year. "Audit the Fed has significant bipartisan support in Congress and across the country and the time to act on this is now."

“My bill calls to eliminate all restrictions placed on Government Accountability Office (GAO) audits of the Federal Reserve. The Fed's credit facilities, securities purchases, and quantitative easing activities would also be subject to Congressional oversight,” the Kentucky Republican added in this week’s letter to the Senate leader. "Similar legislation passed 327-98, with bipartisan support, in the House of Representatives on July 25, 2012. This same bill has been stalled in the Senate for more than three years.”

Indeed, the Kentucky lawmaker’s father — former congressman Ron Paul (R-Texas) — introduced a bill before the US House of Representatives in early 2009 which asked for an audit of the Federal Reserve. Since retiring last year, the older Paul has remained a critic of the central bank.

Earlier this month, Paul Sr. issued a statement saying he was pleased that his Audit the Fed campaign has garnered “such wide support” even after his departure from Capitol Hill. A Rasmussen poll conducted six months earlier determined that “74 percent of the American people want to audit the Federal Reserve.”

Even if his son sees that same support, however, efforts to sideline the appointment of three new Federal Reserve members may be unsuccessful. Sen. Paul said he plans to put a hold on the nominations of Stanley Fischer, Lael Brainard and Jerome Powell to the Fed, but Reuters reported that “their eventual approval seems certain” given the unanimous and bipartisan support they’ve received from the Senate Banking Committee.

“However, due to a tight legislative calendar ahead of a Memorial Day recess later this month, Paul's threat makes it more likely the normally seven-strong board at the Fed will drop to just three members for the first time in the US central bank's history when Fed Governor Jeremy Stein steps down on May 28,” Reuters added.

Nevertheless, Sen. Paul wrote Reid that he “will object to any unanimous consent agreement or the waiver of any rule with respect to these nominees without a vote on S. 209.”

“I know you have been an outspoken proponent of Federal Reserve transparency in the past, and I hope we can work together to pass this important legislation,” Paul concluded his letter.

Should Paul’s efforts prove fruitless, then the Senate is expected to confirm Fischer as vice chairman of the Fed, and both Brainard and Powell will become board members.

“This is completely predictable but effectively meaningless since Republicans are already obstructing virtually all nominees,” Adam Jentleson, a spokesperson for Reid, told the Associated Press.

Last October, Paul unsuccessfully threatened to hold the nomination of Fed Chairman Janet Yellen, who replaced outgoing central bank leader Ben Bernanke. Months earlier, Paul played an instrumental role in halting the appointment of the new director of the Central Intelligence Agency by holding a 13-hour filibuster on the floor of Congress in which he repeatedly demanded that the White House and CIA answer his questions about the use of unmanned aerial vehicles, or drones.

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