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Ron Paul's last hurrah: a big, bipartisan vote to 'Audit the Fed'

Today's vote marks a high point for Paul, who is retires at the end of the year. His signature bill requires a full audit of the Federal Reserve – a move that critics, including Fed chair Ben Bernanke, dub 'nightmarish.'

By Staff writer / July 25, 2012

Rep. Ron Paul (R) of Texas questions Federal Reserve Board Chairman Ben Bernanke (not pictured) during his testimony before the House Financial Services Committee on Capitol Hill in this July 21, 2009, file photo.

Richard Clement/Reuters/File

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Washington

Ron Paul’s last legislative ride in Congress was a resounding victory: His bill to require more extensive auditing of the Federal Reserve swept to passage in a bipartisan vote Wednesday afternoon, 327 to 98. Eighty-nine Democrats sided with all but one of the chamber’s Republicans on the measure.

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Representative Paul, the Texas libertarian and three-time presidential candidate, is a longtime skeptic of the nation’s central bank and has put Audit the Fed, as the legislation is colloquially known, as his attempt at reining in the central bank’s power. There's little appetite on Capitol Hill to do what Mr. Paul would ultimately prefer – that is, to end the Fed altogether.

“The whole idea that they can deal in trillions of dollars and know that nobody is allowed to ask them a question is a moral hazard,” Paul said after the vote. “And this removes that moral hazard.”

The Democrats who sided with Paul were a mix of those in tough reelection contests in conservative leaning districts, such as Rep. Ben Chandler (D) of Kentucky, and the most left-leaning, progressive House members, who have long held deep suspicions of the Fed, such as Rep. Lloyd Doggett (D) of Texas.Two members seeking seats in the Senate – Rep. Shelley Berkley (D) of Nevada and Rep. Tammy Baldwin (D) of Wisconsin – both voted for the measure.

The bill, which has zero chance of passage in the Democrat-controlled Senate although it has 21 Republican sponsors in that chamber, would require a “full audit” of the Federal Reserve by the Comptroller General of the United States before the end of 2012. More importantly, it gives Congress the authority to implement such audits in the future.

Fed Chairman Ben Bernanke recently told the House Committee on Financial Services, which provides oversight of the Fed, that the bank already has plenty of measures in place to ensure transparency. These include testimony before Congress, minutes of meetings between the members of the bank’s board of governors, an audited annual financial statement, the ability of the Government Accountability Office to audit “essentially all aspects” of the bank’s operations, and new requirements for openness placed upon it by the Dodd-Frank financial reform law, Mr. Bernanke said last week.

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