Senate shoots down 'audit the Fed' proposal

© Larry Downing
A proposal to audit the Federal Reserve failed to pass in the US Senate. The bill, proposed by Kentucky Republican Rand Paul, was opposed by the Democrats, the White House, and the business lobby.

The procedural motion on the bill required 60 votes to pass, but managed to get only 53.

"Both Republicans and Democrats agree that it is absurd we do not know where hundreds of billions worth of our money is going,” Paul said ahead of the vote, according to The Hill.

Vermont Senator Bernie Sanders, an Independent currently vying for the Democratic presidential nomination, voted in favor of Paul's proposal.

"Requiring the Government Accountability Office to conduct a full and independent audit of the Fed each and every year, would be an important step towards making the Federal Reserve a more democratic institution that is responsive to the needs of ordinary Americans rather than the billionaires on Wall Street," Sanders said in a statement following the vote.

Texas Senator Ted Cruz, running for the Republican nomination, reportedly did not show up for the vote. He had previously voiced support for the proposed audit.

Senator Marco Rubio of Florida, often criticized for missing important votes, made an appearance and backed Paul's bill.

Paul's initiative ran into fierce opposition from the Federal Reserve, the White House, the Democratic party and the US Chamber of Commerce.

The bill would have required a Government Accountability Office (GAO) audit of the Federal Reserve – a private entity entrusted with managing the US monetary policy – and potentially expose the secret interest rate deliberations of the Federal Open Market Committee, according to Bloomberg.

The White House has called Paul’s proposal “dangerous.”

"What that bill is about is about Congress supplanting its judgment as to what monetary policy should be,” said Jason Furman, chairman of Obama’s Council of Economic Advisers. “Congress shouldn’t be telling the Fed what to do with monetary policy.”

Fed Chairwoman Janet Yellen sent a letter to Senate leadership last week, saying that she opposes the bill. If signed into law, she said, it would be "a grave mistake, detrimental to the economy and the American people."

Critics have also dismissed Paul’s proposal as a political stunt. The Kentucky senator is seeking the GOP presidential nomination, but is currently polling in single digits and may be excluded from the next debate.