August 21, 2012 / 10:06 PM / in 7 years

Republicans make annual Fed audit part of election platform

WASHINGTON (Reuters) - Republicans debating their party’s election platform have decided to incorporate language pressing for a yearly audit of the Federal Reserve, threatening to make the U.S. central bank a political football in the 2012 campaign.

The party’s platform is a non-binding statement of principles that may reflect a more conservative view than Republican politicians may ultimately advance.

Many Republicans accuse the Fed of courting inflation and putting the U.S. dollar’s value at risk through its aggressive efforts to bolster the economy, including its purchase of $2.3 trillion in government and mortgage-related bonds.

The Fed also has been a consistent target for Tea Party conservatives, most notably Texas Representative Ron Paul, who based his unsuccessful bid for his party’s presidential nomination in part on his push for more Fed transparency.

Mitt Romney, who is challenging President Barack Obama for the White House in the November 6 election, said on Monday that he supported an audit of the Fed, but he did not provide details.

A Republican official said the position of the party’s platform committee on the Fed was very close to a bill that passed the Republican-controlled House of Representatives last month, and called for the Fed to be “responsibly” audited on an annual basis.

The House bill, expected to die in the Democratic-controlled Senate, would expose the Fed’s monetary policy decisions to an audit by the General Accountability Office, a congressional investigative agency.

Fed Chairman Ben Bernanke warned lawmakers that an audit covering monetary policy would open the door to the “nightmare scenario” of political interference in Fed policymaking, and could sap the central bank’s credibility and hurt the economy.

Republican delegates will vote on the platform at the party’s national convention next week in Tampa, Florida.

Ron Paul’s son, Republican U.S. Senator Rand Paul, said on Tuesday he would “swamp the Senate with grassroots activism” to get a vote on his version of the House bill in the Senate. That version is not materially different from the House bill, and Senate Democrats are confident that they can defeat it.

Fed officials next meet to debate monetary policy on September 12-13 and many economists expect the central bank to launch a third round of bond purchases. Romney has said further bond purchases would probably not help the economy.

Reporting by Alister Bull and Deborah Charles; Editing by Paul Simao

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