On Wednesday, the House will vote on and pass legislation by Congressman Ron Paul (TX) to audit the Federal Reserve. I cosponsored this needed bill which takes the necessary steps to open up the Federal Reserve and begin to shine light on a government bureaucracy that impacts the daily lives of every American far more than one might imagine.
It’s alarming to know that since the 2008 financial crisis, the Fed has tripled its balance sheet to $3 trillion – the equivalent of 20 percent of the economy. Additionally, the Fed has lent out nearly $16 trillion over the course of the financial crisis – which is more than the size of the entire economy.
While the Fed’s financial statements are audited annually, unfortunately the Fed’s monetary policy operations are currently exempt from being audited. In fact, the daily activities of the Federal Reserve occur with almost no scrutiny by elected Members of Congress or without the watchful eyes of the Government Accountability Office (GAO).
For example, the GAO currently cannot audit the Fed’s followings activities:
- Transactions for or with foreign central banks, governments and international organizations
- Deliberations, decisions, or actions on monetary policy matters
- Transaction made under the direction of the Federal Open Market Committee
- Discussions or communications of the Fed related to points to 1-3.
The “Audit the Fed” legislation would give the GAO the authority it needs to review the monetary policy operations of the Fed and directs the GAO to report the results of the audit to Congress by the end of this year, 2012.
The Federal Reserve is a bureaucracy that has trillions of dollars flow in and out of its doors. The decisions they make are felt by every American. It’s not too much to ask that we know where our money is going and why.
Congressman Aaron Schock represents Illinois' 18th CD.