Judd Gregg says he's worried that politicians on Capitol Hill are sacrificing the Fed's historic independence. Gregg: 'Political pandering' on Fed

A top Senate Republican lashed out against lawmakers of both parties for supporting legislation that would audit the Federal Reserve, accusing the bipartisan group of “political pandering” to populist anger.

Sen. Judd Gregg, the top Republican on the Senate Budget Committee, says he’s worried that politicians on Capitol Hill are sacrificing the Fed’s historic independence because the Fed has become unpopular during the economic crisis.


“This move to bring the Fed’s conduct of monetary policy under the control of Congress is a grave threat to our economy. Congress has demonstrated time and again its inability to manage the nation’s fiscal policy, illustrated by our staggering national debt in excess of $12 trillion, so how can anyone think that its involvement in monetary policy would be good for the country,” Gregg said in a statement.

But hometown anger over the billions in bailouts for big Wall Street firms, much of which came directly from the Fed, has lawmakers in both parties out for blood. The original measure, sponsored by long-time Fed critic Ron Paul (R-Texas), attracted 313 co-sponsors as of Friday, an incredible show of support for Paul’s long running anti-Fed crusade, which has until recently been largely dismissed by the political establishment.

The House Financial Services Committee on Thursday passed, 43-26, an amendment based on Paul’s bill that would direct the Government Accountability Office to vastly expand the scope of its audits of the central bank to include, among other things, details on what banks get what money from the Fed.

While the underlying financial reform legislation would “grant sweeping new powers to the Federal Reserve, at least with this amendment attached, it won’t be acting in secret anymore,” Paul said in a statement after the vote. “This is a major victory for Federal Reserve transparency and government accountability.”

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