Ron Paul at Conference Committee: The American People Strongly Support HR 1207!

Date: 06/16/2010


Ron Paul: I do appreciate coming here because it’s been an issue about auditing the Fed that I worked on for a long time. I was rather disappointed this morning to open up the Internet and read a Reuters News Service article. And it starts off by saying, “Fed dodges bullet as House drops Audit idea”. It goes on to say,

“The Federal Reserve scored a political victory on Wednesday as House Democrats dropped Ron Paul’s Fed Audit provision. The U.S. central bank appears to be emerging largely unscathed by the regulatory effort.”

Of course, that’s a great disappointment to me, but my disappointment is irrelevant to the issue because I think the American people are going to be disappointed. Because we, in the House, the sponsors of HR 1207, which is the Audit the Fed Bill, got 319 House members to support that. And that means there are a lot of Democrats that support it, as well as Republicans.

Now, I’m not an individual that’s very good at arm-twisting and going around and getting co-sponsors. The co-sponsors came from the American people asking their members of Congress to support this bill. So there is a lot of grassroots support for the transparency of the Federal Reserve System. That’s what this bill is all about.

Generally speaking, though, those who oppose auditing the Fed talk about how this would violate the independence of the Fed. And I can understand their concern, but if they know and understand what HR 1207 tries to do, they shouldn’t be worried about that. I think when you hear the word, “Independences of the Federal Reserve”, it usually means “Secrecy of the Federal Reserve” and therefore the Congress has no responsibility or obligation to audit the Fed and to monitor the Fed and to provide oversight of the Fed. And, therefore, since 1913 essentially the Fed has been not very well audited or looked at. And there has been very little transparency. But the American people are very strongly in support of this type of legislation.

Now the other charge that is made is that if we had an audit of the Fed, it would destroy the [ability] of the Federal Reserve to pursue monetary policy. And I don’t believe that is true, either. The provision in HR 1207 says the you can’t even look at what the open market committee does for six months and that’s not like looking over the shoulder of the Fed, but it means that after they do certain things and bail out certain banks or make certain loans, the American people and the Congress, have a right to know exactly what they’re doing.

But, you know, the argument that I would support something that would turn monetary policy, the decision making what interest rates should be and what monetary policy should be, over to the banking committee – I mean, I’m just not for that, whether it’s the Senate banking committee or the House banking committee. And I think that’s rather clear. But I have to be honest about it; I’m not very pleased with the way the Fed does it either, and there should be another option that some day might be made available to us. But, in the meantime we’re looking at advocating, at least those co-sponsors to this bill, that this committee considers seriously keeping that in. And I am hopeful that somebody will bring this amendment up and have a vote on this.

But I think the will of the House should prevail and we should make this recommendation. When it went through the committee it was a bi-partisan vote: 43 members to 26 endorsed this; it was passed on the House floor in the full bill. And now, of course, it’s going to conference. And I think a strong case can be made for our responsibility and for the support of this bill. And believe me, the American people are becoming more aware of the importance of the Federal Reserve and the significance of the Federal Reserve and what it does, not only in the bailouts, but also in creating the problems that we have.

So regardless of what happens, I am very, very confident that the issue of the Federal Reserve will not be laid to rest. The people in this country and more and more people are becoming aware of the fact that the Federal Reserve should not get a free ride. And that is what this is all about: don’t give the Fed a free ride. And, to me, the very best legislation, the very best thing that we can do in legislation now is to insist that HR 1207 be part of this conference report and kept in the bill. And I thank the chairman.

I suggest to Senator Dodd that if he misses my talk, then he can catch it on YouTube, who knows.

What We Can Do for a Fed Audit

This is crunch time. The bankers and lobbyists will be working hard to keep the real audit language (HR1207) out of the final legislation. But we have a voice, too, through our representatives. That is why ours is called a representative government.

Of the House Conferees, 15 of 31 members are co-sponsors of HR 1207, including all Republican members (Bachus, Royce, Biggert, Capito, Hensarling, Garrett, Lucas, Barton, Smith (TX), Issa, and Graves), and four Democrats (Peterson, Boswell, Conyers, and Shuler).

The sixteen (16) Democrats who have not cosponsored HR 1207 are listed below. Their names are conveniently hyperlinked to their contact pages so that you may easily focus your energy on emailing, calling and/or faxing them to express your support for a full and complete audit of the Federal Reserve, and the inclusion of the Paul-Grayson Amendment / HR 1207 in the final financial reform legislation. Be sure to remind them that 80% of Americans want a full audit of the Federal Reserve.

Barney Frank (D – MA)
Paul Kanjorski (D – PA)
Maxine Waters (D – CA)
Carolyn Maloney (D – NY)
Luis Gutierrez (D – IL)
Mel Watt (D – NC)
Gregory Meeks (D – NY)
Dennis Moore (D – KS)
Mary Jo Kilroy (D – OH)
Gary Peters (D – MI)
Henry Waxman (D – CA)
Bobby Rush (D – IL)
Howard Berman (D – CA)
Ed Towns (D – NY)
Elijah Cummings (D – MD)
Nydia Velazquez (D – NY)

Of the Senate Conferees, five have co-sponsored HR1207 (Crapo, Lincoln, Leahy, Harkin, and Chambliss). The seven Senate members to contact (again, conveniently hyperlinked) are:

Chris Dodd (D-Conn.)
Tim Johnson (D-S.D.)
Jack Reed (D-R.I.)
Charles Schumer (D-N.Y.)
Richard Shelby (R-Ala.)
Bob Corker (R-Tenn.)
Judd Gregg (R-N.H.)

I have been assured that contacting members has a real impact. Many listen. Many are worried about being reelected. Many just want their phones to stop ringing, their email inboxes to stop overflowing, and their fax machines untied.

Keep the pressure up and please spread the word.

Thanks to Michael Nystrom.

  • Adam

    I can’t stand Chuck Schumer. He has got to be the biggest failure of a senator since Hillary Clinton. Screw him, he needs to be ousted ASAP before he ushers in more totalitarian bull**** legislation.

  • mark
  • David Aiello

    I contacted Senator Jack Reed (D) RI today. He’s opposed to the inclusion of the Grayson-Paul provision, and he’s also on the conference committee for this issue.

    He responded with what was half a cookie-cutter answer, and half dodging my assertion in regard to the importance of a full audit.

    I can assure you that he is not budging on his position against the inclusion the HR1207 provision. He repeatedly insisted that the Sanders audit is sufficient. Just another part of the machine.

    It’s going to be a tough one, boys.

    Here is the correspondence:

    Senator Reed,

    I would like to firstly thank you for the many years of great representation you have provided for citizens of Rhode Island like myself. I had the pleasure of meeting you in the past as a high school student, and have supported your presence in the Senate.

    I am writing to express my wholehearted support for a full and complete audit of the Federal Reserve, and specifically the inclusion of the Paul-Grayson Amendment / HR 1207 in the final financial reform legislation.

    As evidenced by a May 2010 poll by Rasmussen Reports, approximately 80% of Americans are in favor of a full audit of the Federal Reserve, with just 9% opposing and 12% unsure.

    Your endorsement of full transparency of the Federal Reserve is in the interest of every American who is directly impacted economically by their monetary decisions; and each and every one of us is.

    I understand the primary concerns raised by many opponents of a full Federal Reserve audit. The primary concern is that having such transparency in the Federal Reserve will incline Congress to poke their heads into the internal decisions of the Federal Reserve. The result, opponents say, would be that Congress would then actively attempt to regulate monetary policy, a right which has been granted to the Fed.

    Our founding founders would be ashamed at such a notion. It is a core responsibility of Congress to protect the public’s interest. The Federal Reserve is a private institution which has no obligation to act in the interest of the public. A monetary decision that they make behind closed doors could, for example, be serving the interest of a foreign country such as Greece. Such a decision is thereby putting the burden of a foreign bailout on the taxpayers (as a result of currency inflation via expansion of the money supply). Increasing the money supply perpetually devalues our savings. The macro economical consequences of this mechanism can be potentially debilitating to our quality of life as citizens.

    As a result of the ongoing financial crisis, the money supply is likely being increased at an alarming rate as an attempt to stimulate commerce. As we have seen most recently in Argentina, however, rapid expansion of the money supply can have crippling economic consequences. We must be aware if and when the Federal Reserve is acting outside of the people’s interest. At this point in time, we have no oversight whatsoever in this regard.

    It is brazenly apparent that opposing such oversight of this institution is in direct conflict with the best interest of the public.

    As a young Rhode Islander, I look forward to many years of economic prosperity. If our monetary policy continues to be left in the hands of those not required to act in our interest, the economic prosperity of our entire country is in great Jeopardy.

    David J Aiello Jr.

    Dear Mr. Aiello:

    Thank you for contacting me regarding Wall Street reform. I appreciate hearing your thoughts on this matter.

    These are extraordinarily challenging times, and I share your frustrations about the economic crisis facing our state and nation. Few states have felt the impact of the recession that began in 2007 more than Rhode Island, which faces one of the highest unemployment rates in the nation. The extensive damage of the recent historic floods has only exacerbated our state’s challenges.

    The financial crisis exposed serious problems and cracks in our severely outdated financial regulatory system, which has permitted reckless behavior on Wall Street, enabled banks to profit at taxpayer expense, and denied regulators the tools and authority they need to keep pace with a rapidly changing and expanding financial marketplace.

    As Chairman of the Banking Subcommittee on Securities, Investment, and Insurance, over the past two years I have been actively engaged in the debate on comprehensive legislation to reform Wall Street and helped write H.R. 4173, the Restoring American Financial Stability Act, which was approved by the Senate on May 20, 2010 with my support. H.R. 4173 would ensure that taxpayers are not held responsible for bailing out institutions that engage in the type of reckless and extreme behavior that led to the financial crisis and prevent firms from becoming “too big to fail” by enacting strict capital and leverage requirements. Additionally, under this legislation, executives who engage in irresponsible and risky behavior will no longer be rewarded with outrageous bonuses.

    This legislation includes provisions I authored to enhance oversight and increase transparency by ensuring that credit rating agencies are held accountable when they advise investors of a financial instrument’s value, that hedge funds come out of the shadows and register with federal regulators, that financial derivatives, which many believe were at the root of the financial collapse, are finally subject to clear and effective regulation. It also includes my proposal to create an Office of Financial Research, which would bring greater coordination to financial regulators and provide them with additional tools to prevent and mitigate financial crises and keep pace with new products being engineered on Wall Street.

    Additionally, H.R. 4173 would establish a new Consumer Financial Protection Bureau (CFPB) tasked with shielding consumers from abusive and deceptive practices and providing consumers with the information they need to make informed choices when shopping for mortgages, credit cards, and other financial products. My bipartisan amendment that I offered with Senator Scott Brown to create an Office of Service Member Affairs within the CFPB to monitor and respond to complaints from military families was successfully added to this legislation.

    I am also pleased that Congress recently enacted my request to more robustly fund the Securities and Exchange Commission (SEC), our top financial law enforcement agency, and that H.R. 4173 would enable the SEC to be self-funded through the fees it collects. This will ensure it has the resources in the future to exercise tough oversight of Wall Street. For more information on my efforts to enact Wall Street reform legislation, please visit my website on this matter at

    You may be interested to know that during the debate on H.R. 4713, I supported an amendment offered by Senator Sanders that would require the Government Accountability Office (GAO) to conduct an audit of the emergency actions of the Federal Reserve, including whether there are any conflicts of interest, and submit a report to Congress on the audit. It would also require a separate GAO audit of all of the Federal Reserve Banks. Additionally, the Federal Reserve would be required to publish on its website the names of all of the financial institutions, businesses, and foreign central banks that received emergency assistance since December 1, 2007. This amendment was approved 96 to 0.

    A Senate-House of Representatives Conference Committee must now resolve the differences between the versions of H.R. 4173 passed by the Senate and the House of Representatives. As a member of this Conference Committee, I will continue to advocate for policies to strengthen consumer protections, promote fair lending to consumers and small businesses, rein in Wall Street to prevent future crises, and restore confidence in our financial markets. Moreover, as I continue my work to respond to the economic crisis, you can be assured that I will remain guided by the fact that our financial system, while critical to our economic success, must respect the same kind of rules and standards that hard-working families must meet. Indeed, after a decade of regulatory neglect, we must ensure that Wall Street serves our long-term economic interests.

    Again, thank you for contacting me and please do not hesitate to write, call, or visit my website,, in the future for information regarding this or any other matter.


    Jack Reed
    United States Senator

  • What is the Federeal Reserve good for anyway. It’s good @ manipulating and steal our hard earned tax dollars. & why are those in and outside of congress still defending the Fed? For their own agenda.

  • ElCount

    I just emailed me most of the 16 Congressman and 4 of the Senators urging them to support the effort to include HR1207 into the final reform bill.

    We have come this far and we can’t give up. This is the most crucial time ever to rally support for a Fed audit. If we can’t get it in the 111th Congress Ron Paul should organize a march in Washington and we could show our numbers.

  • Rockstar97321

    The Fed is not an agency of the government. It is a private, for profit banking cartel that has the sole power to create money. The USA has not created money since the birth of the Federal Reserve in 1913 – with the exception of JFK, who created 4.3 billion dollars of real USA money – 5 months before he was assassinated.

  • NYredwhiteandblue

    how could something with over 300 co sponsors have trouble passing… obviously the fix is in… cant get any “in your face” then that…