POLITICS: PennAve

Rand Paul threatens to hold Federal Reserve nominees unless his Fed audit gets a vote

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Sen. Rand Paul threatened Monday to place a hold on three nominees to the Federal Reserve Board of Governors unless his bill to subject the Fed to an audit gets a vote in the Senate.

It's a replay of a maneuver the libertarian Republican and Fed critic attempted last year when current Fed Chairwoman Janet Yellen's nomination was under consideration.

In a letter to Majority Leader Harry Reid, Paul wrote that "there is no more appropriate time to provide Congress with additional oversight and scrutiny of the actions and decisions of the central banks" than during the Senate's consideration of the nominees, whom the Senate Banking Committee approved in late April. The candidates are Stanley Fischer, the former top Israeli central banker nominated to be the Fed's vice chairman, former Obama Treasury official Lael Brainard, and Jerome Powell, a current member of the board seeking a second term.

The Government Accountability Office already audits many of the Fed's functions. But Paul's bill, the Federal Reserve Transparency Act, would provide for an annual audit of all of the Fed's activities, including its emergency loans to banks through its discount window and its monetary policy deliberations.

Although Paul's previous attempt to use a hold on Yellen's candidacy to gain a vote on the bill was unsuccessful, it did garner publicity and support for the measure, which polls favorably and was a long-time goal of his father, the libertarian Texas congressman and author of the book End the Fed, Ron Paul.

Rand Paul's latest effort comes as the Federal Reserve Board is severely understaffed. Setting aside Powell, whose term has expired, there are just three members of the seven-member board left, and one, Jeremy Stein, is set to return to his academic post at Harvard at the end of the month.

Following Reid's decision in November to eliminate the filibuster for executive nominees, however, Paul's ability prevent a vote on the Fed candidates is limited.

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