How Audit the Fed Won the PR War
Senators are currently debating Sen. Bernie Sanders’ (I-Vt.) Audit the Fed amendment to Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill. (Watch the floor debate here.) Just a few moments ago, Sen. Sam Brownback (R-Kans.) took to the floor to accuse executive-branch opponents of the measure of “exaggerating” the possible harm the amendment might do to central bank independence. He repeatedly said that he could not explain to his constituents why it was a bad idea to shed some sunlight on the Fed’s books, noting, “The Congress created the Fed. The Fed didn’t create Congress” — his point being that the Fed should have to answer to Congress for actions that tread on Congress’ turf.
Compared with the vitriolic debate on Sen. Richard Shelby’s (R-Ala.) amendment to gut the consumer protections in the Dodd bill, this debate is sounding like a love-in. Senators across the aisle are nodding in agreement with one another. Dodd even just said he would join as a co-sponsor of Sanders’ bill, which was recently considered something of a fringe priority, pushed by iconoclasts like Sanders and Rep. Ron Paul (R-Texas).
This is the culmination of the great moderation of Audit the Fed: the transformation of an always popular but never prioritized congressional concern. Last year, for instance, Audit the Fed measures in both the House and Senate garnered huge co-sponsorship and support, and a provision passed the House. But nothing came to fruition. This time around that changed, as Audit the Fed proponents forced the administration to respond and insisted on it as a priority. In short: Audit the Fed is getting a vote because senators like Sanders took on and won a public relations push.
The executive branch never could quite come out and say why it would be better to leave the amendment out — presuming, ostensibly, that the amendment would never come up for a vote. Even today, Fed Chairman Ben Bernanke offers only a wan, vague and easily batted-down argument against auditing the Fed, saying “Financial markets, in particular, likely would see a grant of review authority to the GAO in these areas as a serious weakening of monetary policy independence.”
That argument has proved insufficient, and Audit the Fed is due to pass this evening.