In a press release Ron Paul writes Audit the Fed Bill Reaches Crucial Benchmark.

Washington, D.C. – Congressman Ron Paul’s Federal Reserve Transparency Act, HR 1207, has reached and surpassed the level of 218 cosponsors in the House of Representatives, which means it is now cosponsored by a majority of the members.

The 218th cosponsor was Dennis Kucinich (OH-10), and the bill has since received its 222nd cosponsor.

“The tremendous grass-roots and bipartisan support in Congress for HR 1207 is an indicator of how mainstream America is fed up with Fed secrecy,” said Congressman Paul. “I look forward to this issue receiving greater public exposure.”

Hearings on Federal Reserve transparency are expected within the next month, as part of the Financial Services Committee’s series of hearings on regulatory reform.

Congratulation Ron Paul, and thanks to everyone who contacted their representatives.

The key questions now are:

1) How much will the Senate water down the bill?
2) Will Obama sign the legislation?

Congressional Curbs On The Fed?

For clues on what I think about Bernanke please read Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis and Lack of Transparency in Fed Balance Sheet and Liquidity Programs.

For clues on how Omaba feels about Bernanke please read Bernanke Success May Come at Cost of Congress Curbing Fed Power.

As the credit crisis ebbs, U.S. lawmakers are increasingly questioning the actions the Fed took to counter the turmoil. Representatives Edolphus Towns of New York and Darrell Issa of California said yesterday they will call Bernanke to Capitol Hill to testify on his role in pushing through Bank of America Corp.’s purchase of Merrill Lynch & Co. last year.

Even House Financial Services Committee Chairman Barney Frank, who has praised Bernanke in the past, is rethinking proposals to make the Fed the sole overseer of risk in the financial system.

“Members of Congress are finally coming to terms with what the Fed can do,” said Dino Kos, a managing director at Portales Partners LLC in New York and former executive vice president at the New York Fed. “Central banks are able to make far-reaching decisions quickly without congressional approval.”

The result: The Fed may find itself subject to more congressional scrutiny than in the past and might even have some of its powers to intervene in the financial markets and the economy clipped. The fresh questions about the Fed’s steps may also affect Bernanke’s chances of securing a second term as Fed chief when his current four-year stint expires in January.

House Republicans on the Financial Services Committee, led by ranking member Spencer Bachus of Alabama, have also proposed stripping the Fed of its supervisory powers and limiting its emergency authority to give bailout loans.

Support for the Fed in Congress to become the leading systemic-risk regulator has also faded. The Treasury will propose that role for the Fed when the administration rolls out its proposals for financial-regulatory reform, people familiar with the matter said.

No Single Agency

“I don’t think one single agency like the FSA (Financial Services Authority) in England is the best way to go,” Frank, a Massachusetts Democrat, said yesterday in an interview.

Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee, said last month he has “great skepticism” over expanding the central bank’s authority.

Bernanke has also sought to portray the Fed’s expansive use of its powers to prop up the financial system as necessary for the good of the economy.

Main Street Man

“I come from Main Street,” he told CBS News’s “60 Minutes” television program in March, while standing in his hometown of Dillon, South Carolina. “I care about Wall Street for one reason and one reason only, because what happens on Wall Street matters to Main Street.”

After the show, Bernanke received a phone call from the White House. “I called him right after the 60 minutes interview to tell him I thought he did a great job,” Rahm Emanuel, President Barack Obama’s chief of staff, said in an interview.

Why does Obama support Bernanke?

The answer of course is the same reason Bush supported Bernanke: Presidents like to inflate the economy and Bernanke is willing to oblige.

Mike “Mish” Shedlock
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