Congressional committees are jokingly referred to as the place where bills go to die. However, I’m happy to report that my bipartisan bill to audit the Federal Reserve passed the House Oversight and Government Reform committee by unanimous consent this summer, and is now eligible to come before the full House for a vote. Since 90% of bills die in committee, you could say that my legislation had a near-death experience, but that’s a good thing.

Beyond spurious internet ads urging, “Refinance your mortgage now, Fed lowers interest rates by half a point!” most of us do not think about the actual effects of this secretive institution upon our daily lives.

For example, consider that the 2008 financial market collapse was the direct result of the bubble inflated by the easy money, low interest policies of the Fed.

One hundred years ago, Congress established the Fed and delegated its constitutional authority “to coin money and regulate the value thereof.” Under the Fed’s reckless inflationary policies, the dollar has lost over 95% of its value since then. My bill, H.R. 24, the “Federal Reserve Transparency Act,” would remove the veil of secrecy around the Fed.

H.R. 24 is not a controversial bill. In fact, Americans demand transparency, and the House of Representatives has responded by passing this same legislation twice in previous Congresses by huge bipartisan majorities. When its original author, Congressman Ron Paul, first brought his “Audit the Fed” bill to the floor during the 112th Congress, it passed by a comfortable, veto-proof majority of 327 to 98. When its subsequent sponsor, Representative Paul Broun, obtained a floor vote during the 113th Congress, it passed by an even larger majority of 333 to 92.

In fact, among the members of the House Oversight and Government Reform committee who served during the 112th and 113th Congresses, all of the Republicans and over half the Democrats voted in favor of this bill on the House floor.

Yet still some have asked and will ask, “Why do we need this legislation? Isn’t the Federal Reserve already audited?”

It’s true that the Government Accountability Office (GAO) performs a limited financial audit of parts of the Federal Reserve, but this audit is perfunctory due to the limits placed on the GAO by Congress.

The U.S. Code (31 USC § 714) makes several critical exceptions to the Fed’s audit protocol, and these exceptions cover the Fed’s most crucial activities. For example, the GAO is prohibited from examining Fed transactions or agreements with foreign governments, foreign central banks, and international financing organizations. Yet, hundreds of billions of dollars in loans regularly flow to foreign banks.

When these restrictions were originally added in the 1970s, the GAO testified publicly that it could not “satisfactorily audit the Federal Reserve System without the authority to examine the largest single category of financial transactions and assets that it has.”

Therefore, since only a cursory audit is performed, a programmatic audit must also be completed so that Congress can understand what the Fed actually does, and why the Fed does it.

Another question I frequently hear is, “Won’t a full audit compromise the Fed’s independence?” The answer is that without a full audit of the Fed’s decision-making process, how can we know that the Fed is acting independently of the executive branch? Its charter is not to be a second Treasury Department. How can we know that the Fed operates independently of big bank CEOs and Wall Street? Given the revolving door of managers between the Fed, Treasury, and Wall Street, opportunity for outside pressure and conflicts of interest abounds. Only a full audit can demonstrate that the Fed makes decisions independently of the political whims of a President and the profit goals of commercial banks.

I am delighted that my colleagues voted my bill out of committee, and am hopeful that it will soon receive a vote in the full House.

