January 12, 2016

Brown Praises Defeat of Bid to Undermine the Federal Reserve's Independence and Inject Politics into Monetary Policy

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – today praised the Senate’s action to defeat an attempt to politicize the Federal Reserve’s monetary policy deliberations. While the Government Accountability Office, a nonpartisan and independent agency, is required to conduct regular and appropriate audits of the Fed’s activities, narrow exceptions were crafted to shield the Fed from political interference in its monetary policy decision-making. Brown opposed the so-called “Audit the Fed” bill (S. 2232), which fell short of the 60 votes needed to advance.

“This legislation does nothing to benefit working Americans or our recovery. It would introduce politics into the Federal Reserve’s monetary policy decisions, which could have dangerous implications for financial stability,” said Brown. “‘Audit the Fed’ isn’t about transparency; it’s about giving 535 individual members of Congress the ability to micromanage monetary policy.”

Congress requires the Federal Reserve to have its financial statements audited every year by an independent, external auditor. The Fed also releases a quarterly reports presenting detailed information on the Fed’s balance sheet and information on the combined financial position and results of operations of the Reserve Banks to Congress. The annual report, which includes the financial statement audit, the quarterly reports, and other audits, studies, and reviews are available to the public on the Fed’s website.

Since the 2008 financial crisis, the GAO has conducted over 100 audits of the Federal Reserve’s activities. Many of these audits relate to the financial crisis, including the Fed’s emergency lending and discount window activities.