Former Congressman Ron Paul’s entire political career was dedicated broadly to promoting freedom and liberty. However, during that time, he also successfully brought the subject of monetary policy to the forefront of American political discourse, exposing the shadowy, private Federal Reserve’s built-in conflicts of interest and urging lawmakers to first audit it and then cancel the bank’s charter. The private bank, which has the power to manipulate the value of the US dollar, has been accused of giving sweetheart deals to insiders, such as the time it allegedly gave a $220 million bailout to the wives of two Morgan Stanley executives. Its original mandate was to keep the US currency supply stable, though the dollar’s value has plunged to a fraction of what it was worth when the Fed took over in 1913 and has swung wildly throughout the past decade, generating record profits for connected Wall Street insiders while families struggle to afford the rising prices of life’s necessities.
Ron Paul launched a legislative push to audit the Federal Reserve in 2009, taking advantage of the rising popularity he began to experience following his 2008 presidential bid. The bill he introduced, formally called the Federal Reserve Transparency Act but colloquially referred to by the title “Audit the Fed,” passed the House twice, but was blocked by Democratic Senate Majority Leader Harry Reid, who refused to let the Senate vote on the proposed legislation. Ron Paul’s bill would allow the Government Accountability Office to review the Federal Reserve’s books and retroactively analyze the decisions it makes pertaining to monetary policy. Due to a grassroots push inspired by Ron Paul, a partial-but-incomplete Fed audit was included in the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act, which exposed the fact that Federal Reserve insiders were given conflict of interest waivers that allowed them to invest in companies that they knew were receiving emergency bailouts.
Now, Republicans have taken control of the Senate, and Senator Mitch McConnell, an Audit the Fed co-sponsor who happens to be a close associate of Ron Paul’s son Senator Rand Paul, has been tapped as majority leader. Stephan Dinan at The Washington Times is reporting that aides at Mitch McConnell’s office are saying that he plans to finally bring the legislation to the Senate floor for a vote now that he has the power to do so. Politico notes that Republican Congressman Thomas Massie of Kentucky intends to re-introduce the bill in the House at the beginning of the 2015 session. Kentucky GOP Senator Rand Paul says he will launch the companion bill in the Senate in January. McConnell has not yet indicated when the bill might face a vote in the Senate.
Though the House is likely to pass Audit the Fed again, the Senate will be a tougher fight, as banking interests, known for funding the high-dollar campaigns of senators needing to win massive, state-wide races, oppose the legislation. In a press conference cited by The Washington Times, Federal Reserve Chair Janet Yellen said two weeks ago, “Back in 1978 Congress explicitly passed legislation to ensure that there would be no GAO audits of monetary policy decision-making, namely policy audits. I certainly hope that will continue, and I will try to forcefully make the case for why that’s important.” Opponents of the Fed audit claim that it constitutes Congress meddling in affairs too arcane for it to understand and warn that politicization of monetary policy will have unintended consequences.
Norm Singleton with Ron Paul’s Campaign for Liberty said, “The change in Senate leadership does present us with the best opportunity yet to get a stand-alone vote on ‘Audit the Fed’… This is popular with 75 percent of the American people, but it’s not popular among Wall Street; it’s not popular among banks; it’s not popular among foreign central banks… it’s better odds now than we’ve had before, but it’s not a slam dunk.”
A Senate vote on Audit the Fed will likely pit Ron and Rand Paul’s network of grassroots activists against wealthy banking insiders in a historic battle over the nation’s dollar, with both forces urging senators to pick sides. Senator Rand Paul’s presidential aspirations may also play into the debate, as he can use the platform of his presidential bid to apply additional pressure to promote the Fed audit.