Guest Post: Fed Audit Deal Reached In Senate

Washington’s Blog

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.


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.

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About George Washington

George Washington is the head writer at Washington’s Blog. A busy professional and former adjunct professor, George’s insatiable curiousity causes him to write on a wide variety of topics, including economics, finance, the environment and politics. For further details, ask Keith Alexander…


  1. propertius

    I wonder what would happen if a Fed audit revealed that it was insolvent. Just musing…

  2. readerOfTeaLeaves

    Sometimes senate aides need a bill number to be certain that they know what a citizen is calling about.

    In this case, the Brown-Kaufman bill number is S-3241.

    And people need to phone, even if it is to help their senator ‘cover their butt’ with Wall Street and face down lobbyists by being honestly able to say, “Hey, I had too much public pressure on TBTF to vote for Wall Street.’

    A week ago, I didn’t think this would actually, truly come to a vote.
    This really is remarkable to watch.

  3. Andy

    I’m seeing the dow dropped 1,000 and is now down 440. News outlets are saying it’s the Greece problem and liquidity issues in Europe. However, could it be that traders have gotten wind of this new effort to bust the banks?

    1. Francois T

      That is precisely why big banks must be broken up and brought to manageable size. Hell! They trade instead of lending. What good it is to us?

      They are impeding growth right now.

  4. jawbone

    Couple questions:

    1) Does anyone have a good analysis of what’s happened with Bernie Sanders and his working with Dodd on changes to his amendment?

    His statement on the floor wasn’t very informative. To me, at least.

    2) NPR noted that there were some stock price changes which made no sense at all, seemed far from normal even for something like today, which had no relation to Greece. Unless traders thought consumer were going to stop buying pet food and toilet paper and laundery soap: P&G swooped from around 60 to down to around 40, then back up again. Reporter on NPR said this never happens with consumer stocks.

    Oh, plus they’re using a teaser about a trader’s typo — someone hit a B (billion) for M (million) and all hell broke loose…or something. Really?

    I have no idea if that is accurate or not — so am wondering.

  5. Jerry

    Hey….I have 2000 rolls of toilet paper in my basement in preparation for the second dip so yes I did sell my P & G……

  6. Robert Oak

    Senator Sanders usually compromises when he has no chance of getting something passed and he usually changes on the Senate Floor at the last minute. This is a real bummer, as I called it a bait n switch. I think Sen. Sanders needs to rethink his poker face after this one.

    Then, the break up based on GDP failed. On our site, are some details on the vote tally. I’m personally not so sure about breaking up the Banksters based on GDP, would prefer a hard line in derivatives and a separation of commercial from investment banking. Although having 6 banks be 63% of GDP, maybe it was a good idea, but our Senate, corrupt as hell and also no guts, doesn’t look good.

    Wanna bet Lincoln’s derivative’s amendment gets gutted with “end user” exemptions?

  7. ep3

    sure blame it on Bernie. The fact that the white house probably would have totally hosed him on the next election cycle doesn’t help. Bernie tried and got screwed by the people who are protecting these big bankers yet Ron Paul criticizes Bernie as the bad guy.

  8. Jedward

    Hi check out there are some cool forums and articles or just type jedward into google its on the first page. Pretty awesome website.

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