“The Fed can no longer operate in virtual secrecy,” declared Vermont independent Bernie Sanders Tuesday after the Senate voted 96-0 to add his "Audit the Fed" amendment to the financial regulatory reform bill.
The Senate amendment is not as muscular as the bipartisan legislation backed by the House, which was sponsored by Florida Congressman Alan Grayson, an aggressive progressive, and Texas Congressman Ron Paul, an equally agressive conservative with libertarian leanings. The Grayson-Paul bill authorizes audits by the Government Accountability Office of every item on the Federal Reserve’s balance sheet, including all credit facilities and all securities purchase programs; there would be exemption only for unreleased transcripts, minutes of closed-door meetings and the most recent decisions of the central bank. The Senate measure is narrower in its focus, but it would require the GAO to scrutinize some several trillion dollars in emergency lending that the Fed provided to big banks after the September, 2008, economic meltdown.
The actual amount of public money that has been set aside for private banks is not known. That’s one reason why this audit is so important. But there can be no doubt that the figure is astronomical. The Center for Media and Democracy’s Wall Street Bailout Tally shows that since 2008, the U.S. government has flooded Wall Street banks and financial institutions with $4.7 trillion dollars in taxpayer money, mostly in the form of loans from the Fed reserve. The Fed has never told us which firms got these loans and what type of collateral American taxpayers got in return. This will now be revealed. We will also get an accounting of the Fed’s “stealth” bailout of Fannie Mae and Freddy Mac.
Sanders tried to pass a broader amendment, but when he faced roadblocks—and the prospect that audit laguage might be excluded entirely from the final bill—he agreed to propose an amendment outlining the one-time audit of post-meltdown Fed activity. That did not sit well with all senators. Even as Republicans such as New Hampshire’s Judd Gregg tried to prevent any demand for transparency, Louisiana Republican David Vitter proposed tougher language along the lines what Grayson and Paul pushed through the House. While most Democrats and a number of Republicans opposed the tougher language, Sanders joined the most serious reformers in the Democratic caucus—Wisconsin’s Russ Feingold, Washington’s Maria Cantwell, North Dakota’s Byron Dorgan, Arkansas’s Blanche Lincoln, Virginia’s Jim Webb and Oregon’s Ron Wyden—in voting "yes."
The Vitter amendment failed on a 62-37 vote and Feingold was especially disappointed. "Unfortunately," the Wisconsin progressive declared, "the defeat of the Vitter amendment means American taxpayers will still not have a complete picture of how one of the most powerful government agencies makes policy and spends their tax dollars.”