Patrick Murphy’s (PA -8) response to HR1207
June 29, 2009
Dear Ms. Serdula:
Thank you for contacting me in regards to H.R. 1207, the Federal Reserve Transparency Act of 2009. As I work to meet the needs of our community and our nation, please know how much I value having the benefit of your views.
During this current recession it is crucial that we take action to
jumpstart the economy and put Americans back to work, while always being mindful of the bottom line. Reckless spending without oversight is not the answer. As your Congressman, I have strongly advocated the need to monitor our spending and ensure transparency in all government agencies and programs.
For these reasons, I am pleased to report to you that I am a proud
cosponsor of H.R. 1207. As you know, H.R. 1207 requires the Comptroller General of the Government Accountability Office (GAO) to audit the Federal Reserve banks and the Board of Governors of the Federal Reserve System by the end of 2010, and to submit a report of their findings to Congress. The bill also lifts certain previous restrictions that limited the GAO’s ability to perform audits on federal agencies. The Federal Reserve plays an important role by serving as a backbone for the banking system, but it has too often conducted its operations in an unclear manner and with minimal oversight. In light of its responsibilities, it is imperative that the Federal Reserve’s operations are fully transparent, and I believe H.R. 1207 contains the measures necessary to ensure that this is the case. By eliminating restrictions on GAO audits, the bill will open up the Fed’s funding facilities – such as the Primary Dealer Credit Facility, Term Securities Lending Facility, and Term Asset-Backed Securities Lending Facility – to Congressional oversight. Congress and the American people will be able to monitor how and to whom the Federal Reserve is lending taxpayer dollars.
Our recent economic difficulties further underscore the need for
openness and accountability in this area. You may also be interested to know that I voted for H.R. 384, the Troubled Assets Relief Program
(TARP) Reform and Accountability Act of 2009. This important bill would bring much needed accountability and transparency to the way in which TARP money has been distributed to banks and financial institutions. I’ve been very upset to hear the reports of how this money has been distributed, and even angrier to hear that it required the threat of a subpoena to force financial institutions to release details about their involvement with this program. In particular, I felt it was necessary to shed light on the half a trillion dollar deal, made last November, in which the Federal Reserve purchased mortgage-backed securities (MBS) and then contracted out the management of these securities to four private investment firms. The American people have a right to know how this arrangement was conducted, which is why I introduced an amendment to H.R. 384 that requires the Federal Reserve to disclose how the investment managers for the MBS Purchase Program were selected. In addition, the amendment necessitates that the government provide details of both the manager contracts and the steps taken to ensure that the program remains free from conflicts of interest. This amendment unanimously passed the House on January 15, 2009, and H.R. 384 is currently awaiting consideration by the Senate.
Guaranteeing oversight and financial responsibility has always been one
of my foremost priorities. In the last session of Congress, I introduced H.R. 5467, the Improper Payments Elimination and Recovery Act
of 2008. This legislation, which was cosponsored by Congressman Ron
Paul, requires the head of each federal agency to annually review all
agency programs and identity those programs and activities that made
payments that should never have been paid – either through error or
ineligibility. This bill is a necessary step in the process of getting
our fiscal house in order, and I look forward to reintroducing it to the
111th Congress and working towards its passage.
Hearing from the families I serve is vital to doing my job right.
Thanks again for taking the time to share your concerns and I hope you will keep in touch with me on this or any other issue that is important to you. To stay informed of my work, or to sign up for my electronic newsletters, please visit my website at http://patrickmurphy.house.gov
Sincerely,
Patrick J. Murphy
MEMBER OF CONGRESS