End Fed Secrecy

As the Senate debates financial reform, one of the most high-profile amendments has drawn backing from a remarkable coalition of Republican and Democratic senators.  Senator Bernie Sanders' amendment would launch a Government Accountability Office audit of the Federal Reserve and force the Fed to disclose online all the recipients of trillions of dollars in taxpayer loans from the Fed.  On the Senate floor, Sanders recalled, "When he came before the committee, I asked Mr. Bernanke if he would release the names of the financial institutions that received trillions of dollars on near zero interest loans. He said he would not do that."  On that day, Sanders introduced his Fed transparancy legislation. 

Sanders' amendment, which he will fight to include in the financial reform bill the Senate is debating, has 19 co-sponsors from both sides of the aisle and vocal support from both liberal and conservative advocacy organizations (see below).  A nearly-identical proposal by Congressmen Ron Paul (R-Texas) and Alan Grayson (D-Fla.) was included in the House-passed version of the Wall Street reform legislation.  The Sanders amendment is sponsored by 12 Republican senators (DeMint, McCain, Grassley, Vitter, Brownback, Risch, Wicker, Graham, Crapo, Hatch, Bunning, and Robert Bennett) and 7 Democrats (Feingold, Leahy, Wyden, Dorgan, Boxer, Shaheen, and Cantwell).

fedContrary to some reports, this amendment would not spur political influence on Fed monetary policy.  The amendment explicitly says: "Nothing in this subsection shall be construed-(A) as interference in or dictation of monetary policy to the Federal Reserve System by the Congress or the Government Accountability Office."

Quotes of Support

MoveOn.org: Sen. Bernie Sanders is offering a critical amendment to the financial reform bill that would bring transparency and accountability to the Federal Reserve. It will give us a public accounting of what went wrong and how our money was spent so we can learn from this disaster and make sure we don't repeat the same mistakes in the future.  Wall Street and the Federal Reserve are fighting the amendment, but we have a real shot at winning—there is growing bipartisan support for it.

FreedomWorks and Americans for Tax Reform: This amendment does not take away the “independence” of the Fed. It simply requires the GAO to conduct an independent audit of the Fed and requires the Fed to release the names of the recipients of more than $2 trillion in taxpayer-backed assistance during this latest economic crisis. (Read more)

AFL-CIO: Since the start of the financial crisis, the Federal Reserve has dramatically changed its operating procedures. Instead of simply setting interest rates to influence macroeconomic conditions, it rapidly acquired a wide variety of private assets and extended massive secret bailouts to major financial institutions. (Read more)

National Taxpayer Union
: We believe S. AMDT 3738 would help lessen the blow to taxpayers as it implements a degree of accountability and transparency not currently found in the underlying bill.  Transparency is not a Democrat or Republican issue, but rather an issue of right or wrong.

Others: “Since the start of the financial crisis, the Federal Reserve has dramatically changed its operating procedures. Instead of simply setting interest rates to influence macroeconomic conditions, it rapidly acquired a wide variety of private assets and extended massive secret bailouts to major financial institutions,” wrote signed a group including Andrew Stern, president of the Service Employees International Union; William Black, associate professor of economics and law at the University of Missouri-Kansas City; Robert Weissman, president of Public Citizen; Dean Baker, co-director of the  Center for Economic and Policy Research; Professor James K. Galbraith of the University of Texas, Austin; and author Nomi Prims, a senior fellow at Demos.


Watch the senator's questioning of the Fed chairman during a budget committee hearing here: