Saturday, January 30, 2010

SENATORS MOVE TO BLOCK AUDIT OF FED

SENATORS MOVE TO BLOCK AUDIT OF FED

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POWERFUL SENATORS ARE WORKING to undermine landmark legislation passed by the House on Dec. 11, 2009 that would give the federal government the power to audit the Federal Reserve, says Rep. Barney Frank (D-Mass.), head of the House Financial Services Committee.

According to Frank, Sen. Chris Dodd (D-Conn.), who heads the Senate Banking Committee, has personally assured Sen. Judd Gregg (R-N.H.) that any audit-the-Fed language would never make it through his committee to be included in any Wall Street reform package in the Senate.

Dodd, who recently announced he will not be seeking reelection during the midterm elections next November, is currently vetting a broad Wall Street reform package in the Senate. It is unknown whether that bill contains the provision, which mandates an official audit of the privately owned and controlled U.S. central bank by the Government Accountability Office. Gregg, who is also a member of the banking committee, has been one of the most vocal opponents of any bill in the Senate that would open the Fed up to public scrutiny.

In 2009, following House passage of the audit the Fed amendment sponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), Gregg released a blunt statement, declaring: “Passage of the Paul Amendment by the House Financial Services Committee is a dangerous move by this Congress to pander to the populist anger currently directed against our central bank, the Federal Reserve."

Both Dodd and Gregg have benefited from sizeable donations from Wall Street firms. According to FEC records, in the past five years, Gregg has received over $20,000 in donations from big banks like Citigroup and Wall Street firms like Goldman Sachs. The health insurance industry is the only other industry that has donated more to Gregg. Dodd has also benefited from sizeable donations from the money trust. In the past five years,

Dodd has received $3.8 million from Wall Street. On Main Street, there is a growing backlash against the Fed’s policies, which are seen as benefiting big banks and Wall Street to the detriment of working-class Americans.

The recent election of Republican Scott Brown to the Senate in Massachusetts has prompted Democrats in the Senate to take a stronger populist position in opposing international corporations and Wall Street. This means legislation to audit the Fed could still be added to any reform bills making the rounds in the Senate and has as good a chance as any of ending up on Obama’s desk.

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