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Original Sanders Fed Audit Amendment WIll Get a Vote, In the Form of a Vitter Amendment

May 11, 2010 - by Donny Shaw

UPDATE: The Sanders one-time Fed audit amendment has passed, 96-0. The Vitter amendment to open up the Fed to audits in perpetuity was rejected, 37-62.

Last week, an amendment from Sen. Bernie Sanders [I, VT] to remove a section of U.S. code that protects the Federal Reserve from meaningful audits looked set to pass over objections from Banking Committee Chairman Sen. Chris Dodd [D, CT] and the White House. Then, all of a sudden, to alleviate concerns that it would put President Obama in a sticky situation (there was speculation that he would veto the whole financial reform bill over the amendment), Sanders agreed to change his amendment so that it keeps the special protections in U.S. code in tact, and instead allows the government to conduct a one-time audit of the Fed and what they have done from Dec. 1, 2007 until now, notwithstanding the special protections.

The revised Sanders amendment is going to get a vote today. It is expected to pass.

Thanks to Sen. David Vitter [R, LA], something very similar to the original Sanders amendment is going to get a vote today as well. In addition to removing the special protections from audits for the Fed from U.S. code, the Vitter amendment adds new language to help preserve the Fed’s political independence. It reads:

“Audits of the Federal Reserve Board and Federal reserve banks shall not include unreleased transcripts or minutes of meetings of the Board of Governors or of the Federal Open Market Committee. To the extent that an audit deals with individual market actions, records related to such actions shall only be released by the Comptroller General after 180 days have elapsed following the effective date of such actions.”

The major difference between the Sanders and the Vitter amendments that will be voted on tomorrow is that the Vitter amendment would allow for government audits of the Federal Reserve going forward into the future, while the Sanders amendment would allow the Fed to continue operating under the same audit protections they enjoy currently after one audit is performed. The original Sanders amendment (now the Vitter amendment) was probably going to pass last week before the deal was struck to weaken it. Since the deal is now in place with the White House to support the revised version, most Democrats will probably shy away from the Vitter amendment, which is actually very similar to what they likely would have supported last week.

Ron Wyde n [D, OR], Tom Harkin [D, IA], Ben Cardin [D, MD] and many more senators are co-sponsors of Sanders’ original audit the Fed legislation. It will be interesting to see how they vote on it tomorrow, now that it is sponsored by a Republican and shunned by the Obama Administration.

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