Deal Killer? White House Takes Aim At Fed Audit Provision

[cal04]

video at link
http://tpmdc.talkingpointsmemo.com/2010/05/obama-administration-ramps-up-opposition-to-fed-audit-provision.php?ref=fpblg

Possibly today, but if not today then soon, the Senate will decide whether or not to follow the House's lead and adopt a provision requiring government auditors to open up the books at the Federal Reserve. The measure enjoys a great deal of popularity on both the left and the right, but is so fiercely opposed by powerful interests that it could nonetheless become a stumbling block in the way of financial regulatory legislation.

Right now Sen. Bernie Sanders (I-VT) is trying to round up 60 or more votes to overcome a likely filibuster and include an "audit the Fed" provision in the Senate's bill. There are just a few small obstacles: the White House, major financial institutions, and the Fed itself. Their resistance is fierce--but the measure is so popular that killing it will be difficult for them and that, in their eyes, threatens to put a grenade at the center of efforts to to tighten the rules on Wall Street.

The pushback is reminiscent, in a way, of the executive branch's institutional opposition to oversight of the nation's intelligence agencies and operations. The Fed has always been shrouded in secrecy, and its leaders (in both the private and public sector) continue to insist on keeping their activities opaque, in order, they say, to protect complicated monetary policy from the political process.

It is believed that the Fed loaned major financial institutions upwards of $2 trillion during the financial crisis. Sanders' legislation would require the Government Accountability Office to conduct a comprehensive audit of the central bank, and force it to make public which companies received that money, and under what terms. Chairman Ben Bernanke opposes the latter on the grounds that exposing the institutions that required dramatic assistance would be counterproductive to the goal of restabilizing the financial system.

[Vincardog]

1. Whose money is it?

[katandmoon]

2. Why is the WH opposing this?

[WhiteTara]

3. Geitner would be in DEEP SH*T if the truth

was told. He needs this to be shut down now. We, of course, need this to happen.

[zipplewrath]

4. For the basic reason outlined

A loss of control.

The Fed makes decisions about monetary policy, and they don't want that process open to the public. For many of the obvious reasons, but also because they don't need people attempting to influence the process through manipulation of the markets or the data. They also have data which would expose the health (or lack thereof) of banks and their overall business strategies. Those businesses would be less open with the Fed if they knew the information would soon be "public".

It is a bit of a stretch to say the Fed has never been audited. It is audited regularly. It is merely the case that there are certain areas not open to the auditors. So it is not a COMPLETE audit. Someone probably ought to add to the bill that the audit can remain confidential, or otherwise "secret" in the same manner that so much other information in government has distribution restrictions on it. That should answer most of the administrations concerns.

[katandmoon]

5. Got it. So "transparency" is only what Obama says it is. Not what he wanted us to think it was.

When it comes to protecting banks' ability to fuck over the public and the economy with government looking the other way rather than upset the big contributor apple cart, transparency need not apply.

[The Northerner]

6. +1

[chill_wind]

7. K & R.

We'll be watching and we won't be forgetting.

[girl gone mad]

8. Hey, Barack and Rahm, maybe someone forgot to tell you...

this is supposed to be a democracy. You were elected to work on behalf of the people, not the kleptocratic international banking cartel.