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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.'

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With that in place, what more could the Fed divulge?

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Specifically, the Fed could be required to divulge deliberations surrounding its monetary policy decisions, the discussions among the central bank’s members that lead to raising or lowering of interest rates, for example.

Revealing such discussions to the public “is very concerning because there's a lot of evidence that an independent central bank that makes decisions based strictly on economic considerations and not based on political pressure will deliver lower inflation and better economic results in the longer term,” Bernanke said.

Without such confidentiality, Bernanke said, the bank would be subject to increased political pressure.

“I do feel it's a mistake to eliminate the exemption from monetary policy and deliberations which would effectively, at least to some extent, create a political influence or a political dampening effect on the Federal Reserve’s policy decisions,” he said.

Asked about Bernanke’s rejoinder, Paul was dismissive.
 
“That’s just nonsense,” Paul said Wednesday. “It’s less political if it’s out in the open. It’s when it's secret that it becomes political and the special interest have control.”
 
 Republicans backed the bill because they, like Paul, believe existing audits of the Fed don’t go far enough – and it isn’t enough to take the Federal Reserve at its word.

 “Although the Fed is audited to see whether, basically, some numbers are correct on a limited basis, the truth is the Federal Reserve is not open and transparent, even years after they make a decision,” said Rep. Darrell Issa (R) of California, who chairs the Committee on Oversight and Government Reform, on the House floor Thursday.

“Do we in fact know the true numbers, do we know the leverage, the policies, the accuracy, and the knowledge of the Federal Reserve?” Mr. Issa said. “Do we know what we need to know?”

Democrats who approved of the measure connected with the theme of openness and accountability.

Democrats in opposition to the bill, however, said that putting Congress and the American political process further into the Fed’s business would do great damage to an institution that has attempted to remain outside the partisan fray.

“I agree with Chairman Bernanke that congressional review of the Fed's monetary policy decisions would be a ‘nightmarish scenario,’ especially judging by the track record of this Congress when it comes to governing effectively and intervening in the courts and other areas,” said House minority whip Steny Hoyer (D) of Maryland on the House floor Tuesday.  “We don't have to look further than the Congress unnecessarily taking the country to the brink of default last summer in a display of politics.”

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