- Jeff - This is from May 6, 2010 WSJ.com but it doesn't
go far enough to explain that the US Congress has oversight of the CIA
and NSA but virtually ZERO OVERSIGHT of the FED. As a result the FED is
virtually independent and coequal with the authority of the US Congress
which is insane. - HM
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- Fed Scrambles To Stave Off Oversight
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- By JON HILSENRATH and MICHAEL CRITTENDEN
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- Federal Reserve officials are becoming increasingly concerned
that challenges to their authority and independence are gaining momentum
in the Senate as it considers financial overhaul legislation.
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- Presidents of four regional Fed banks went to Capitol
Hill Wednesday to personally make their case against several proposals
in the legislation, including one that would strip them of authority to
oversee thousands of small, state-chartered banks and one that would make
the president of the Federal Reserve Bank of New York a presidential appointee.
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- "Attempts to politicize the Fed by making the political
appointment process reach ever further down in its governance structure
would undermine its independence and ensure that its leaders were more
attuned to short-run politics," Charles Plosser, president of the
Philadelphia Fed, said in a statement at a closed-door meeting with the
Joint Economic Committee of Congress.
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- Momentum in the Senate has moved against the Fed on a
number of issues in recent days. Sen. Bernie Sanders, a Vermont independent,
has proposed a measure that would subject the Fed to congressional audits,
an idea that has broad support among both the right and the left in Congress.
A vote on Mr. Sanders amendment could come as soon as Thursday.
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- Fed officials have pressed hard against this proposal,
saying it would invite congressional meddling in decisions about inflation
and interest rates, and are becoming more worried it could pass.
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- A White House spokesman said, "We are working closely
with Congress to encourage transparency and accountability for the Fed,
but we would oppose measures that undermine the independence of monetary
policy."
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- After the meeting with the regional bank presidents,
Sen. Sam Brownback, a Kansas Republican, said Mr. Sanders's proposal was
a "prudent, common-sense" idea. In addition to Mr. Plosser, the
meeting included Thomas Hoenig, president of the Kansas City Fed, Jeffrey
Lacker of the Richmond Fed and Narayana Kocherlakota of the Minneapolis
Fed.
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- Also on Wednesday, another pair of senators said they
would try to use the financial overhaul legislation to force the Fed to
comply with recent court rulings requiring it to disclose information specifically
on its emergency lending programs.
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- Byron Dorgan, a North Dakota Democrat, and Charles Grassley,
an Iowa Republican, said they would offer an amendment that would make
the Fed disclose which financial institutions received emergency assistance
through various lending facilities, as well as the terms of that aid.
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- "The Fed refuses to disclose this information to
the American people, so we are taking Congressional action to determine
how the Fed has used these trillions of dollars," Mr. Dorgan said
in a statement.
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- The Federal Reserve's Board of Governors asked a federal
appeals court Monday to reconsider a ruling that ordered it to disclose
documents related to individual borrowing from its discount window and
other "last resort" lending programs.
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- In separate rulings in March, the New York-based 2nd
U.S. Circuit Court of Appeals upheld a lower court's decision granting
a request by Bloomberg LP's Bloomberg News for documents related to usage
of the Fed's discount window and other programs and vacated a ruling denying
a request for documents by Fox News Network LLC's Fox Business Network.
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- Fox News Network is a unit of News Corp., which owns
Dow Jones & Co., publisher of The Wall Street Journal.
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- -Damian Paletta contributed to this article.
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- Write to Jon Hilsenrath at jon.hilsenrath@wsj.com
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