In a bit of mixed news, Reuters reports that HR1207 may eventually come to the floor:
WASHINGTON (Reuters) - Rep. Barney Frank, the chairman of the U.S. House of Representatives Financial Services Committee, hopes to craft a compromise bill with lawmakers who want to open Federal Reserve monetary policy decisions to audits, a spokesman for Frank said on Saturday.
A bill sponsored by Texas Republican Rep. Ron Paul that would allow the Government Accountability Office, a federal watchdog agency, to audit Fed interest-rate decisions has won the co-sponsorship of more than half of the House.
Although Rep. Frank has been opposed to the bill in many ways (if he wasn't, the bill would've come to the floor and passed with a large margin already), and although the threat of "compromise" watering the bill down still looms over our head, this is a great development, I think. We have everything to gain and nothing to lose: if Rep. Frank were not willing to "compromise", he could probably use a variety of political tactics to ensure that this bill does not come to the floor, even with the majority support. On the other hand, while we are "compromising", I have hard time imagining that "Dr. No" would agree to anything that takes the essential power of the bill away: make the Fed accountable to the people of the United States. So, I take this as a good news. In addition, we have this quote from Rep. Frank:
The Financial Times reported on Saturday that Frank hoped to bring forward compromise legislation that would safeguard the Fed's independence, while enhancing transparency and creating checks and balances for the central bank's use of emergency lending powers.
Steven Adamske, a spokesman for Frank, told Reuters the congressman would work with Paul on a compromise bill. He said compromise language had not yet been written and provided no further details. A spokesman for Paul could not be reached.
The Financial Times said Frank told constituents at a recent "town hall" meeting that the House would probably approve legislation in October. "I want to restrict the powers of the Federal Reserve in a number of ways," the paper quoted Frank as saying.
It should be some accomplishment to get a liberal representatives to say, during one of the most liberal administrations in the past decades, that he wants to restrict the power of any (domestic) government agency. (There's some bit of unknown with the proposed "consumer protection agency", but let's fight one battle at a time.)
At least that's what he's claiming:
A small-business owner complained to Bernanke that such actions were "hard to swallow," saying he felt like small businesses -- also struggling to survive the recession and all the financial fallout -- were being shortchanged.
"Nothing made me more frustrated, more angry, than having to intervene" when companies were "taking wild bets," Bernanke said. But not acting would have had grave consequences for the economy, he added.
"I was not going to be the Federal Reserve chairman who presided over the second Great Depression," he said. "I had to hold my nose ... I'm as disgusted as you are.... I absolutely understand your frustration."
It's great to know that he shares our disgust in the government intervening to pick winners (usually the big companies like AIG, GM, and Chrysler) and losers (any small business owners getting crowded out by the government and big corporations).
Now, will he please agree to the GAO audit of the Fed so that we can verify that his sentiments are based on facts and reality, not just another set of lies spun off by the allies of the Obama administration?
Or does he have something to hide?