View Full Version : The Washington establishment suffers a serious defeat (HR 1207)

11-23-2009, 09:03 AM
The Washington establishment suffers a serious defeat
Approval of the Paul/Grayson bill to audit the Fed is both rare and important in several ways

Glenn Greenwald


Nov. 20, 2009 |

Something quite amazing happened yesterday in Congress: the House Finance Committee -- in a truly bipartisan and even trans-ideological vote -- defied the banking industry, the Federal Reserve, the Democratic leadership, and mainstream Beltway opinion in order to pass an amendment, sponsored by GOP Rep. Ron Paul and Democratic Rep. Alan Grayson, mandating a genuine and probing audit of the Fed. The Huffington Post's Ryan Grim has the best account of what took place, noting:

In an unprecedented defeat for the Federal Reserve, an amendment to audit the multi-trillion dollar institution was approved by the House Finance Committee with an overwhelming and bipartisan 43-26 vote on Thursday afternoon despite harried last-minute lobbying from top Fed officials and the surprise opposition of Chairman Barney Frank (D-Mass.), who had previously been a supporter.

Grim details how key Committee Democrats such as Frank -- who spent the year claiming to support an audit of the Fed in the face of rising anger over its secret and bank-subservient policies -- suddenly introduced their own amendment (sponsored by Democratic Rep. Melvin Watt) that would have essentially gutted the Paul/Grayson provisions. Banking industry and Fed officials, as well as the Democratic leadership, then got behind that alternative provision as a means of pretending to support transparency while protecting the Fed from any genuine examination. Notwithstanding the pressure exerted on Committee Democrats to support that watered-down "audit" bill, Grayson convinced 15 of his colleagues to join with Republicans to provide overwhelming support for the Paul/Grayson amendment. As Grim notes:

[Frank] urged a no vote, yet 15 Democrats bucked him, voting with Paul. Key to winning Democratic support was a letter posted early Thursday from labor leaders and progressive economists. The letter, organized by the liberal blog FireDogLake.com, called for a rejection of the Watt substitute and support for Paul.

Grayson was able to show Democratic colleagues that the liberal base was behind them.

"Today was Waterloo for Fed secrecy," a victorious Grayson said afterwards.

The bill still faces substantial hurdles in becoming law, of course, but yesterday's vote has made that outcome quite possible, and it's worth noting several important points highlighted by what happened here:

(1) Our leading media outlets are capable of understanding political debates only by stuffing them into melodramatic, trite and often distracting "right v. left" storylines. While some debates fit comfortably into that framework, many do not. Anger over the Wall Street bailouts, the control by the banking industry of Congress, and the impenetrable secrecy with which the Fed conducts itself resonates across the political spectrum, as the truly bipartisan and trans-ideological vote yesterday reflects. Populist anger over elite-favoring economic policies has long been brewing on both the Right and Left (and in between), but neither political party can capitalize on it because they're both dependent upon and subservient to the same elite interests which benefit from those policies.


11-23-2009, 09:12 AM
wow- support from salon.com?

11-23-2009, 09:15 AM
I haven't done my homework but does this amendment warrant a yes vote on the “Financial Stability Improvement Act of 2009″ to which it's being added?

EDIT: Nevermind.. it is worth while to punch them in the mouth when they're gonna shoot you anyways.

11-23-2009, 09:29 AM
Ron stated on CNBC that he will be voting against the bill.

11-23-2009, 09:34 AM
Ron stated on CNBC that he will be voting against the bill.

What an amazing man.

(btw... is that online anywhere?)

11-23-2009, 09:34 AM
What an amazing man.

(btw... is that online anywhere?)


11-23-2009, 09:59 AM
Quite interesting, I think the key is that the US will be able to audit foreign transactions if this passes.

Currently the code allows an audit, but with exclusions. The exclusions are gotten rid of by HR1207.
-"may carry out an onsite examination of an open insured bank or bank holding company only if the agency has consented in writing"
-"transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization"
-"deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits and open market operations"
-"tranactions made under the direction of the Federal Open Market Committee"
-"a part of discussion of communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to (the above exclusions)"

The amendment still has the same exclusions except for the first one that requires written consent. And it allows for meetings of the Reserve Board to stay private with market actions being released 180 days after they are taken.

Although the overall bill is an expansion of power, the amendment is basically HR1207.