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Plan for Congressional Audits of Fed Dies in Senate
Key Excerpts from Article on Website of Wall Street Journal
Posted: May 17th, 2010
http://online.wsj.com/article/SB1000142405274870437070457522...
Last-minute maneuvering in the Senate allowed the Federal Reserve to sidestep legislation that would have exposed its interest-rate decision-making to congressional auditors. Pressure from the Obama administration led Senate lawmakers to alter a provision pushed by Sen. Bernie Sanders (I., Vt.) that was gaining momentum despite opposition from the Treasury and the Fed. It would have largely repealed a 32-year-old law that shields Fed monetary policy from congressional auditors. Thursday's Senate showdown came after senators on the left and right joined forces to support Mr. Sanders' provision. "At a time when our entire financial system almost collapsed, we cannot let the Fed operate in secrecy any longer," Mr. Sanders said. "The American people have a right to know." But Fed Chairman Ben Bernanke ... said in a letter to Congress the Sanders measure would "seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation."
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