WASHINGTON (Reuters) - The U.S. House of Representatives overwhelmingly passed a bill on Wednesday that would open up Federal Reserve monetary policy decisions to a congressional audit, reviving a measure passed in 2012.
But the legislation approved by the Republican-dominated House is expected to meet a fate similar to its predecessor‘s: death in the Democratic-controlled Senate.
The “Federal Reserve Transparency Act” passed 333-92 in a bipartisan vote. It is largely similar to the 2012 “Audit the Fed” bill championed by former libertarian Representative Ron Paul.
The new measure would require the Government Accountability Office to conduct an audit of the Federal Reserve Board and the 12 Federal Reserve Banks within 12 months of enactment. A report to Congress would be due 90 days after the audits were completed by the nonpartisan congressional watchdog.
The bill would also repeal a limitation that had shielded the U.S. central bank’s monetary policy decisions. The measure would require the GAO to audit Fed reviews of homeowners who were in foreclosure in 2009 and 2010 that were required as part of enforcement actions taken by the central bank against financial institutions at the time.
“Today’s passage of the ‘Audit the Fed’ bill brings us one step closer towards bringing much-needed transparency to our nation’s monetary policy,” Representative Paul Broun of Georgia, the bill’s Republican sponsor, said in a statement. “For the past 100 years, the Federal Reserve, a quasi-government agency, has acted under a veil of secrecy, controlling our monetary policy and thus our economy.”
Ron Paul’s son, Republican Senator Rand Paul of Kentucky, has introduced a companion bill in the Senate with 30 co-sponsors, but there are no plans to consider it before the end of the year, a senior Senate Democratic aide said.
That means an expected death for the House measure, which would require Senate action before the next Congress takes office in January. If no action is taken by then, it would need to be reintroduced and submitted for a new vote.
The Senate is expected to adjourn this week after considering a stopgap government funding measure that also will authorize the Pentagon to train and equip Syrian rebel groups to fight Islamic State militants.
It will reconvene after the Nov. 4 midterm congressional elections, but the brief “lame-duck” session is expected to be dominated by consideration of a longer-term spending bill, issues related to Iraq and Syria and other legislation.
Some conservative and libertarian Republicans in Congress have objected to the Fed’s massive bond-buying program to hold down interest rates after the financial crisis, arguing that the central bank had strayed into fiscal policy and that these actions would stoke future inflation.
However, others have opposed any action that could be construed as an attempt to politicize the Fed.
Reporting by David Lawder; Editing by Jonathan Oatis