In this Audit the Fed update, Ron Paul explains what is happening with HR 1207 in the Monetary Policy Subcommittee, describes his plan to protect HR 1207 in the full Financial Services Committee, and provides ideas on actions we can take to keep the bill from being watered down.
The 13 Democrats on the House Financial Services Committee mentioned by Dr. Paul are:
Rep. John Adler, NJ (202) 225-4765, Web Contact: Link
Rep. Travis Childers, MS (202) 225-4306, Web Contact: Link
Rep. Steve Driehaus, OH (202) 225-2216, Web Contact: Link
Rep. Alan Grayson, FL (202) 225-2176, Web Contact: Link
Rep. Rubén Hinojosa, TX (202) 225-2531, Web Contact: Link
Rep. Suzanne Kosmas, FL (877) 956-7627, Web Contact: Link
Rep. Dan Maffei, NY (202) 225-3701, Web Contact: Link
Rep. Brad Miller, NC (202) 225-3032, Web Contact: Link
Rep. Walt Minnick, ID (202) 225-6611, Web Contact: Link
Rep. Ed Perlmutter, CO (202)-225-2645, Web Contact: Link
Rep. David Scott, GA (202) 225-2939, Web Contact: Link
Rep. Brad Sherman, CA (202) 225-5911, Web Contact: Link
Rep. Jackie Speier, CA (202) 225-3531, Web Contact: Link
Ron Paul: I’d like to give you an update on HR 1207. For the last couple of weeks I have been talking with Mel Watt, the chairman of the monetary policy sub-committee in dealing with HR 1207. And it seemed like there were reasonable discussions but I never expected a whole lot to come from this. I never expected as much support from Mel Watt as I believe I can, and hopefully still get from Barney Frank. But the way the process works is a sub-committee does get first crack at it. What happens in the full committee is a different story and we don’t know exactly what will happen. But there is no doubt that Mel Watt is not interested in HR 1207. And I don’t think he’s all that bashful about speaking for the Federal Reserve because that was in the conversation quite frequently, that he was trying to satisfy all parties including the Fed. But that shouldn’t surprise any of us. They’re very, very powerful and very, very influential.
But when he took HR 1207 and marked it up and sent it back to me, obviously, it was something I could not support. Although there were two items in it that were rather minor that both he and I have agreed to, but it’s not as significant as it should be. The one part, though, was that having a timeframe on when we could look at certain procedures of the Federal Reserve, and that was accepted. But the fact that they took away the audit itself, those numbers don’t mean a whole lot, except in one area – and that’s dealing with the 13(3) lending facilities that the Federal Reserve has more or less conceded that they’re going to have to reveal what has happened there. But that is minor. As a matter of fact, HR 1207 doesn’t even mention 13(3), we’re mainly talking about an overall audit of overall monetary policy and arrangements oversees.
So that, ironically, actually helps the Fed – putting a time limit. I believe they more or less have conceded that we would get to know what’s happening with their lending facilities, but with the time lag on there of 6 months, it actually helps them. So what happens so often in legislation is you start out with one goal and you end up making things actually worse. And that’s what they’re trying to do. This will actually help the Fed under current circumstances. So my job and our job is to stick to what we want and that is a true audit.
Now, it is likely to come up soon and next week we’re supposed to start working on the overall reform package for all the financial institutions. And because Mel Watt is the sub-committee chairman he gets to ensure his provision in there on what we’re going to do with the Fed. Now, when he does that I will have the opportunity to replace it and amend what he’s done with HR 1207, and obviously I will be doing that.
Now, it looks like we have the upper hand, at least on the surface we do. From the banking committee we have all the Republican members who have co-sponsored the bill. We have 13 Democrats, so we have a good solid majority in the committee that should support us. That’s not always the way things work. Sometimes people support legislation for political reasons back home, and at the same time when they have to vote on it, they vote differently when their arms get twisted.
I believe it’s going to boil down to how strong a position Barney Frank takes on this. And I plan to talk to him. I’m still talking with him and with cordial relations and I’m sure he’s going to have to take a position one way or the other. So, I don’t think he’s as strongly opposed to what I am doing as Mel Watt is. So the amendment will come up so if people can influence their congressmen and say you can figure out which 13 are already co-sponsors, they have to be urged. I only urge courtesy and not threats or anything like that, that the end of the world is going to come if they don’t do it what you tell them to do. I still think we have to work through this the best we can diplomatically.
Like I said, I’m not surprised this has happened, but let’s say we are successful and we get it amended, we still ought to bring it to the House floor, and then they’ll have a chance to water it down again. It goes through rules committee, that’s another place. It has to go through the Senate; it’s going to have a harder time in the Senate. Then it has to go to a conference committee and that’s another problem. And then it has to go to the President. And even if it goes through all that, we still have the courts to deal with, and courts have never been friendly to those of us who want honest money. They were never friendly to the people who held gold clause contracts and believe the government shouldn’t renege on their promises.
But, nevertheless, this is crucial. This is really important. This whole thing might take a year or two to play out, but it might only take a year for the dollar to play out. So this is why it is so crucial. If the dollar doesn’t last very long and something has to come up to replace the dollar or have a new system, we have to be in that debate and that means we have to pursue this. So it is crucial that instead of becoming a little bit discouraged with this and think that this is very strange, this is really rather typical. The special interests comes in at the last minute and this time it’s the special interest banks, and the big corporations who love to have inflationary programs that finance the military-industrial complex. And they will have to come to a decision on what they’re going to do.
So I would say that the process is working more or less the way I expected. This is going to be a very important week. But the whole issue of sound money and limited government and liberty and the Constitution – actually, that concern is not going to go away no matter what happens, in the next couple of weeks or so. But we will gain a lot of momentum if we can at least restore the language of HR 1207 in the banking reform bill which will be in the House Committee next week.