[Congressional Record (Bound Edition), Volume 160 (2014), Part 10]
[House]
[Pages 14822-14825]
[From the U.S. Government Publishing Office, www.gpo.gov]




                FEDERAL RESERVE TRANSPARENCY ACT OF 2014

  Mr. MEADOWS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 24) to require a full audit of the Board of Governors of the 
Federal Reserve System and the Federal reserve banks by the Comptroller 
General of the United States, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 24

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Reserve Transparency 
     Act of 2014''.

     SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF 
                   GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

       (a) In General.--Notwithstanding section 714 of title 31, 
     United States Code, or any other provision of law, the 
     Comptroller General shall complete an audit of the Board of 
     Governors of the Federal Reserve System and the Federal 
     reserve banks under subsection (b) of such section 714 within 
     12 months after the date of the enactment of this Act.
       (b) Report.--
       (1) In general.--Not later than 90 days after the audit 
     required pursuant to subsection (a) is completed, the 
     Comptroller General--
       (A) shall submit to Congress a report on such audit; and
       (B) shall make such report available to the Speaker of the 
     House, the majority and minority leaders of the House of 
     Representatives, the majority and minority leaders of the 
     Senate, the Chairman and Ranking Member of the committee and 
     each subcommittee of jurisdiction in the House of 
     Representatives and the Senate, and any other Member of 
     Congress who requests the report.
       (2) Contents.--The report under paragraph (1) shall include 
     a detailed description of the findings and conclusion of the 
     Comptroller General with respect to the audit that is the 
     subject of the report, together with such recommendations for 
     legislative or administrative action as the Comptroller 
     General may determine to be appropriate.
       (c) Repeal of Certain Limitations.--Subsection (b) of 
     section 714 of title 31, United States Code, is amended by 
     striking the second sentence.
       (d) Technical and Conforming Amendments.--Section 714 of 
     title 31, United States Code, is amended--
       (1) in subsection (d)(3)--
       (A) in subparagraph (A)--
       (i) by striking ``or (f)'';
       (ii) in clause (i), by striking ``or (f)''; and
       (iii) in clause (ii), by striking ``or (f)''; and
       (B) in subparagraph (C), by striking ``or (f)''; and
       (2) by striking subsection (f).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
North Carolina (Mr. Meadows) and the gentleman from Maryland (Mr. 
Cummings) each will control 20 minutes.
  The Chair recognizes the gentleman from North Carolina.


                             General Leave

  Mr. MEADOWS. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include extraneous materials on the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from North Carolina?
  There was no objection.
  Mr. MEADOWS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, H.R. 24, the Federal Reserve Transparency Act, directs 
the GAO to conduct a full audit of the Federal Reserve.
  The Dodd-Frank legislation mandated a GAO audit of the Fed, but that 
audit issued by the GAO in July of 2011 focused solely on certain 
issues concerning emergency credit facilities. GAO remains restricted 
under the current law from conducting a broader audit of the Fed that 
includes, for instance, a review of the Fed's monetary policy 
operations and its agreements with foreign governments and central 
banks.
  Under this bill, the GAO, as the investigative arm of Congress, is 
allowed

[[Page 14823]]

to conduct the audit that reviews all these transactions and is 
required to report such findings of the audit to Congress.
  Now, while Congress should not manage the details of monetary policy, 
it needs to be able to conduct oversight of the Fed. The Fed was 
created by Congress to be a central bank independent of influence of 
the U.S. Treasury. It was never intended to be a second Treasury 
Department.
  In recent years, the Fed's extraordinary interventions into the 
economy and financial markets have led some to call into question its 
independence. The Fed remains ultimately responsible to the American 
people and their elected representatives. This is why H.R. 24 has 
strong bipartisan support, with 228 cosponsors on both sides of the 
aisle. A version of this bill passed the House of Representatives last 
Congress by a vote of 327-98.
  I want to thank Chairman Hensarling for working with me to bring this 
legislation to the floor. I will insert our letters of exchange in the 
Congressional Record.
  I encourage and urge my colleagues to support this legislation.
  Mr. Speaker, I reserve the balance of my time.
                                         House of Representatives,


                              Committee on Financial Services,

                               Washington, DC, September 12, 2014.
     Hon. Darrell Issa,
     Chairman, House Committee on Oversight and Government Reform, 
         Washington, DC.
       Dear Chairman Issa: On July 24, 2014, the Committee on 
     Oversight and Government Reform ordered H.R. 24, the Federal 
     Reserve Transparency Act of 2013, as amended, to be reported 
     favorably to the House. As a result of your having consulted 
     with the Committee on Financial Services concerning 
     provisions of the bill that fall within our Rule X 
     jurisdiction, I agree to discharge our committee from further 
     consideration of the bill so that it may proceed 
     expeditiously to the House Floor.
       The Committee on Financial Services takes this action with 
     our mutual understanding that, by foregoing consideration of 
     H.R. 24, as amended, at this time, we do not waive any 
     jurisdiction over the subject matter contained in this or 
     similar legislation, and that our committee will be 
     appropriately consulted and involved as the bill or similar 
     legislation moves forward so that we may address any 
     remaining issues that fall within our Rule X jurisdiction. 
     Our committee also reserves the right to seek appointment of 
     an appropriate number of conferees to any House-Senate 
     conference involving this or similar legislation, and 
     requests your support for any such request.
       Finally, I would appreciate your response to this letter 
     confirming this understanding with respect to H.R. 24, as 
     amended, and would ask that a copy of our exchange of letters 
     on this matter be included in your committee's report to 
     accompany the legislation and/or in the Congressional Record 
     during floor consideration thereof.
           Sincerely,
                                                   Jeb Hensarling,
     Chairman.
                                  ____

         House of Representatives, Committee on Oversight and 
           Government Reform,
                               Washington, DC, September 12, 2014.
     Hon. Jeb Hensarling,
     Chairman, Committee on Financial Services,
     Washington, DC.
       Dear Chairman: Thank you for your letter regarding the 
     Committee on the Financial Services' jurisdictional interest 
     in H.R. 24, the ``Federal Reserve Transparency Act of 2013,'' 
     and your willingness to forego consideration of HR. 24 by 
     your committee.
       I agree that the Committee on Financial Services has a 
     valid jurisdictional interest in certain provisions of H.R. 
     24 and that the Committee's jurisdiction will not be 
     adversely affected by your decision to forego consideration 
     of H.R. 24. As you have requested, I will support your 
     request for an appropriate appointment of outside conferees 
     from your Committee in the event of a House-Senate conference 
     on this or similar legislation should such a conference be 
     convened.
       Finally, I will include a copy of your letter and this 
     response in the Committee Report and in the Congressional 
     Record during the floor consideration of this bill. Thank you 
     again for your cooperation.
           Sincerely,
                                                     Darrell Issa,
                                                         Chairman.

  Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
  I rise, Mr. Speaker, in opposition to H.R. 24.
  Let me be clear. I support transparency surrounding the operations of 
the Federal Reserve. Transparency helps ensure that the Federal Reserve 
is implementing policies that will achieve the objectives given to it 
by Congress: supporting maximum employment, price stability, and 
moderate, long-term interest rates.
  I emphasize, however, that the Federal Reserve has been subject to 
audit since 1978. Further, the Dodd-Frank Wall Street Reform and 
Consumer Protection Act, which I supported, significantly expanded the 
authority of the Government Accountability Office to examine the 
Federal Reserve's operations.
  It also required the Federal Reserve to make public a wider range of 
data than it had previously disclosed. For example, Dodd-Frank 
authorized GAO to begin auditing discount window operations and 
required the Federal Reserve to begin releasing information about 
emergency credit transactions and discount lending programs.
  Critically, however, Dodd-Frank ensured that transparency surrounding 
the Fed's operations was expanded in a way that would not compromise 
the Fed's ability to review and alter monetary policy without fear that 
its internal deliberations would be made public.
  Mr. Speaker, if enacted, this bill would severely curtail the 
independence that has been a hallmark for the Federal Reserve and has 
been essential to its ability to strengthen our country. Specifically, 
H.R. 24 would permit GAO to audit the communications that members of 
the Federal Reserve's Board of Governors have with each other and with 
staff regarding monetary policy.
  The act would also permit GAO to audit transactions conducted under 
the direction of the Federal Open Market Committee. Such audits, which 
could be conducted on an almost real-time basis under this bill, could 
have a chilling effect on the Fed. If board members know that their 
statements may become public, they may be inhibited from speaking 
candidly about the economic trends they are observing or the monetary 
policies they believe would best respond to current conditions. 
Further, simply by requesting that the GAO conduct certain audits, 
Members of Congress could seek to influence the Fed's deliberations and 
policy decisions.
  The Federal Reserve is responsible for stewarding monetary policies 
that will support our Nation's long-term growth. We should expand 
transparency surrounding the Federal Reserve in a way that will ensure 
short-term political considerations do not unduly influence the Federal 
Reserve's monetary policymaking responsibilities.
  The Oversight Committee has not held a single hearing or heard a 
single witness regarding the far-reaching consequences that passage of 
this legislation could have. I oppose this legislation, and I urge 
Members to vote against it.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  2000

  Mr. MEADOWS. Mr. Speaker, I yield such time as he may consume to my 
distinguished colleague from the State of Georgia (Mr. Broun), a man 
who has worked very hard on this particular issue.
  Mr. BROUN of Georgia. Mr. Speaker, in the United States Constitution, 
article I, section 8, where it enumerates the powers of Congress, one 
of those powers is, as I am reading, ``to coin money, regulate the 
value thereof, and of foreign coin.''
  In 1913, Congress abdicated its responsibility and its duty over to 
the Federal Reserve. It is unconstitutional that we have done so, and 
it has caused some disastrous effects.
  I thank my friend Mr. Meadows for yielding me time to speak on behalf 
of H.R. 24, the Federal Reserve Transparency Act, better known as 
``Audit the Fed.''
  This is the same bill that passed the U.S. House in the 112th 
Congress by an overwhelming bipartisan majority. This is a vital piece 
of legislation that will help to usher in a new era of transparency in 
this Nation's monetary policy, and I am pleased to speak on its behalf 
with my colleagues.
  Over the century, since its inception in 1913, the Federal Reserve 
has controlled our Nation's monetary policy--

[[Page 14824]]

and therefore our economy--under a veil of secrecy. Throughout these 
last 100 years, Congress has only exercised a relatively small degree 
of oversight over the Federal Reserve. This lack of accountability has 
led to grievous consequences, and this must end.
  For instance, since the Federal Reserve establishment in 1913, the 
value of the U.S. dollar has fallen 95 percent. In other words, the 
value of today's dollar is approximately worth one nickel of what a 
dollar was worth in 1913. What this does is cause a dramatic decline in 
the value of the U.S. dollar, and it is driven by the easy money 
policies of the Federal Reserve.
  What does this mean in practical terms for the American people?
  The steady decline of the U.S. dollar punishes thrift and savings, 
erodes the value of those savings, and harms older Americans living on 
fixed incomes. Just as bad, the expansion in money supply under the 
Federal Reserve has led to an unstable environment of booms and busts 
that have wrecked the financial security and stability of average 
Americans. This hurts poor people and senior citizens and the middle 
class the absolute most. Rich people will do fine with the policies of 
the Federal Reserve. Wall Street bankers and the big money folks are 
fine, but the policies of the Federal Reserve hurt poor folks, they 
hurt senior citizens, and they hurt the middle class. It is not fair.
  Since the 2008 financial crisis, the Federal Reserve's balance sheet 
has grown at an unprecedented rate, and it now contains $4 trillion 
worth of assets. At the same time, the enactment of the Dodd-Frank 
financial reform law has granted the Federal Reserve a greater role 
than ever in managing our economy and in overseeing the regulation of 
our financial system. Yet, in spite of the undeniable importance of the 
Federal Reserve, current law specifically prohibits audits of the 
Federal Reserve's deliberations, discussions, or actions on monetary 
policy.
  In 2011, a partial audit of the Federal Reserve, required by the 
Dodd-Frank law, found that the Fed had loaned $16 trillion to financial 
institutions, some of which were not even American, between 2007 and 
2010. This incredible sum was quietly loaned out with no public notice 
and no congressional oversight. If this is the sort of activity brought 
to light by just a partial audit, then I believe this further 
highlights the absolute necessity of a full audit. This bill will 
require a full audit of the Board of Governors of the Federal Reserve 
and of the Federal Reserve banks within 12 months of enactment.
  The Federal Reserve is a creation of Congress, and it must therefore 
be subject to the oversight and regulation of Congress.
  I must recognize and commend the leadership and years of work by my 
friend and colleague, Dr. Ron Paul, on this important issue. In the 
last Congress, Dr. Paul's bill amassed a bipartisan coalition that saw 
this legislation pass in a 327-98 vote. I am deeply honored to carry on 
this legacy of Dr. Paul's.
  I urge my colleagues here in the House to support this important 
piece of legislation, and I urge our friends in the Senate to take up 
this bill's counterpart by my medical colleague, Senator Rand Paul's S. 
209.
  Mr. CUMMINGS. Mr. Speaker, I continue to reserve the balance of my 
time.
  Mr. MEADOWS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Kentucky (Mr. Massie).
  Mr. MASSIE. I thank the gentleman from North Carolina.
  Mr. Speaker, I rise today in support of my friend and colleague 
Congressman Paul Broun's Federal Reserve Transparency Act, otherwise 
known as ``Audit the Fed.''
  Our mutual friend and predecessor, Congressman Ron Paul, first 
introduced this bill back in 1983. His often lonely voice and 
courageous efforts to shed light on the secretive and harmful actions 
of the Federal Reserve have finally paid off over 30 years later. In 
July of 2012, Congressman Paul's ``Audit the Fed'' bill passed the 
House of Representatives by an overwhelming vote of 327-98. Sadly, it 
has yet to receive a vote in the Senate.
  As Congressman Ron Paul stated here on the House floor in 2011, in 
words that remain current and relevant today in 2014:

       Throughout its nearly 100-year history, the Federal Reserve 
     has presided over the near-complete destruction of the United 
     States dollar. Since 1913, the dollar has lost over 98 
     percent of its purchasing power, aided and abetted by the 
     Federal Reserve's loose monetary policy. How long will we as 
     a Congress stand idly by while hardworking Americans see 
     their savings eaten away by inflation? Only big spending 
     politicians and politically favored bankers benefit from 
     inflation.
       Since its inception, the Federal Reserve has always 
     operated in the shadows, without sufficient scrutiny or 
     oversight of its operations. While the conventional excuse is 
     that this is intended to reduce the Fed's susceptibility to 
     political pressures, the reality is that the Fed acts as a 
     foil for the government. Whenever you question the Fed about 
     the strength of the dollar, they will refer you to the 
     Treasury and vice versa. The Federal Reserve has, on the one 
     hand, many of the privileges of government agencies while 
     retaining benefits of private organizations, such as being 
     largely insulated from Freedom of Information Act requests.
       The Federal Reserve can enter into agreements with foreign 
     central banks and foreign governments, and the GAO is 
     prohibited from auditing these agreements. Why should a 
     government-established agency, whose police force has Federal 
     law enforcement powers and whose notes have legal tender 
     status in this country, be allowed to enter into agreements 
     with foreign powers and foreign banking institutions with no 
     oversight?
       Particularly because the Fed has operated swap lines with 
     foreign central banks and provided hundreds of billions of 
     dollars of bailouts to foreign commercial banks, the Fed's 
     negotiations with the European Central Bank, the Bank for 
     International Settlements, and other foreign institutions 
     should face increased scrutiny, most especially because of 
     their significant effect on foreign policy. Given the 
     currency crisis in Europe and the prospect of the Fed 
     propping up foreign governments or bailing out American banks 
     invested in European debt, this issue is of especially 
     pressing concern.

  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. MEADOWS. I yield the gentleman an additional 1 minute.
  Mr. MASSIE. Thank you.
  Congressman Ron Paul's words are even more true today than they were 
then, and that is why I urge my colleagues to vote in favor of this 
bill. It is time to force the Federal Reserve to operate by the same 
standards of transparency and accountability to the taxpayers that we 
should demand of all government agencies.
  Mr. CUMMINGS. Mr. Speaker, I continue to reserve the balance of my 
time.
  Mr. MEADOWS. Mr. Speaker, at this point, I have no additional people 
wishing to speak on this particular bill, but I would like to read one 
statement from Senator Rand Paul. He said: ``It is time for more 
transparency in virtually every part of our government.''
  I think most Americans can agree on that, and the Fed is the most 
logical place to start. I hope the House passes the ``Audit the Fed'' 
bill, and I look forward to pushing this bill in the Senate.
  I reserve the balance of my time.
  Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
  Again, I will be brief, but I urge Members to vote against the 
legislation. I think it is a giant step in the wrong direction.
  I yield back the balance of my time.
  Mr. MEADOWS. Mr. Speaker, I yield myself the balance of my time.
  Tonight, we have heard from the distinguished gentleman from Georgia, 
who not only has authored this legislation but has pushed at every 
attempt to make sure that we have accountability and transparency. The 
American people deserve that.
  When much of the financial crisis was happening in 2008, this very 
body debated over and over again on whether a stimulus should be put 
forth to stimulate the economy. At the same time, the Federal Reserve 
was making investment dollars that made that stimulus package look very 
small in comparison. Yet we are to assume that, like other government 
agencies, they are doing everything correctly. We know, as history has 
shown us, that that is not always the case.
  I urge all of my colleagues to join me in supporting this particular 
bill--to support transparency, to let the accountability be with the 
American people.

[[Page 14825]]

  I yield back the balance of my time.
  Ms. WATERS. Mr. Speaker, I rise today in opposition to H.R. 24, a 
bill that would undermine the Federal Reserve's independence and 
politicize its monetary policy decision making.
  Mr. Speaker, this so called ``Federal Reserve Transparency Act'' has 
little to do with bringing transparency and accountability to the 
Federal Reserve. The truth is--this bill is nothing more than an effort 
to pressure and discourage the Fed from ever again being able to take 
the extraordinary action it has taken in recent years--action which has 
lowered unemployment, stabilized prices, and kept our economy from 
entering a second Great Depression.
  Mr. Speaker, the Federal Reserve is already subject to extensive 
transparency, oversight and disclosure requirements, including regular 
audits with limited exemptions.
  The fact is, since 1982 the Government Accountability Office has had 
the authority to audit the books of the Federal Reserve Board and the 
Federal Reserve Banks. And in 2009, as part of the Dodd-Frank Act, 
Congress required GAO to audit the emergency lending facilities created 
in response to the financial crisis. This has already been accomplished 
and the results of the audit are posted on the Federal Reserve's 
website.
  If that wasn't enough, the Board's financial statements are audited 
on an annual basis by an outside auditor--and the results are published 
in the Board's Annual Report.
  In addition to audits of its financial statements and emergency 
lending programs, the Federal Reserve provides comprehensive 
communication on monetary policy deliberations--releasing statements, 
publishing minutes and issuing transcripts following the completion of 
Federal Open Market Committee Meetings.
  Furthermore, since 2011 the Chairman of the Federal Reserve has held 
regular press conferences to discuss the outlook for the economy and 
explain the rationale for its Federal Reserve policy decisions.
  I find it baffling that we are here debating whether the Federal 
Reserve should be more open and transparent--even as Janet Yellen is 
scheduled to hold a press conference to discuss the outlook for 
monetary policy tomorrow afternoon.
  While the Fed's decisions are--and must continue to be--transparent, 
it is also imperative that monetary policy decision making remain 
insulated from short-term political pressures--in order to promote 
economic growth and keep inflation in check.
  But Mr. Speaker, this legislation would empower the GAO to 
investigate any and all policy decisions made by members of the Federal 
Reserve's rate setting committee, including decisions about when, and 
how, to unwind the Federal Reserve's ongoing stimulus program.
  Doing so would wipe out all of the statutory protections that ensure 
deliberations, decisions, and actions on monetary policy matters are 
shielded from second guessing.
  By empowering the GAO to challenge the decisions of Fed policy 
experts, and make legislative or administrative recommendations to the 
Congress, this measure aims to inject political pressure into monetary 
policy decisions--something that would undermine the Fed's ability to 
make the tough--and sometimes unpopular--decisions that are necessary 
for the good of the economy.
  But this is not the Republican Majority's first politically motivated 
assault on the Federal Reserve's independence. We've seen this time and 
again.
  Earlier this year Financial Services Committee Republicans took up 
and passed the ``FRAT Act'', a bill which virtually eliminates any 
discretion the Fed has to set monetary policy--by forcing it to make 
decisions in accordance with a mathematical formula and by requiring 
GAO to investigate any deviation from it--even in the case of changing 
economic conditions.
  Such absurd constraints on the Federal Reserve would inevitably 
increase uncertainty surrounding policy decisions, and decrease the 
public's confidence that the Fed can act appropriately in response to 
new economic realities.
  In closing I would reiterate that it is important for the American 
people to understand that these bills are not designed to address real 
problems, or a lack of transparency. Rather, the FRAT Act--and the bill 
before us today--are unnecessary.
  They will cause needless uncertainty and undermine the Fed's ability 
to conduct monetary policy in an independent manner.
  I urge my colleagues to oppose this legislation.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from North Carolina (Mr. Meadows) that the House suspend the 
rules and pass the bill, H.R. 24, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. MEADOWS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

                          ____________________