PoliticalAction.com Blog

Texas Straight Talk – A Weekly Column
Rep. Ron Paul (R) – TX 14

It has been an interesting week indeed for the Federal Reserve. Early this week, it was announced that President Obama intends to reappoint Fed Chairman Ben Bernanke to a second term in January, signaling a vote of confidence in him. Bernanke seems to be popular with the administration and with Wall Street, and with good reason. His lending policies have left big banks flush with newly created cash that covers up old mistakes and allows for new ones. By buying up mountains of Treasury debt he has also enabled spending to soar to ridiculous levels that should startle any responsible economist, and scare any American concerned about the value of the dollar. However, these highly sensitive decisions about our money are not made by economists, they are made by politicians. Bernanke, like most of his predecessors, is the politician’s best friend. However, there is no reason to believe any other central planner would behave any differently, considering the immense political pressure on the Fed.

Fed policies have been as bad for the economy as they are good for politicians and bankers, as the recently released numbers on the debt and deficit demonstrate. For the first time since World War II the annual budget deficit is projected to be over 11 percent of the nation’s gross domestic product. It is also projected that by 2019 the national debt will be 68% of GDP. Our path, if unchanged, is completely untenable.

The administration claims that it inherited a dire situation from the last administration, which is absolutely true. However, that hasn’t stopped them from accepting all the policies and premises that got us here, and accelerating those policies to rapidly make a bad situation much worse. The bailouts started with the last administration. They have gotten bigger with this one. The last administration gave us expanded government involvement in healthcare with a new prescription drug benefit. This administration gave us a renewal and expansion of SCHIP, and now the current healthcare takeover attempts. In reality, we can afford none of this, but shady monetary policy allows Washington to continue along its merry way, aggravating all our economic problems.

Not everyone in government finds it acceptable that the Fed wields so much power and privilege in secrecy. Last week, a federal judge ruled against Fed secrecy, compelling them to release under the Freedom of Information Act information regarding which banks received emergency loans, and under what terms. The Fed will, of course do everything in its power to fight this ruling and it is certainly not the last word on the issue. Still, it is encouraging to see that the interests of the taxpayers were defended victoriously in court, while the Fed only sees the plight of its big banker friends.

Meanwhile HR 1207 and S604, legislation to open up the Fed’s books to a complete audit, continue to gain momentum in Congress as the people continue to insist on real transparency of the Federal Reserve. One way or another, the days of Fed autonomy are coming to an end, as well they should. No one should have the power to debauch the currency and gut the economy as they do. It is time they answered for their actions, so the people can understand that we truly are better off with freedom instead of Fed tyranny.

Dear Friend of Liberty,

Turn on the TV . . . pick up a paper . . . surf the news sites . . . even visit Youtube.

Everywhere you look, Congressmen are catching heat in their own backyards.

They thought going back to their districts during August recess would be a breath of fresh air and a time to unwind. Boy, were they wrong!

Now they can’t wait to run off back to Washington, D.C. to escape the mobs of outraged constituents in their home districts.

So that’s why we need to make their return to D.C. as politically unpleasant as some of these townhall meetings.

Campaign for Liberty is launching a mass action movement, and we need you to be a part of it.

Starting right away, it is time to double down on collecting signatures for S 604, the Senate Audit the Fed Bill.

While Congress is still on recess, townhall meetings are a great place to gather tons of petition signatures.

To make things interesting, Campaign for Liberty is upping the stakes. The person who gathers the most signatures in each state will win a pocket Constitution and a copy of Dr. Paul’s new book End the Fed, both autographed by Dr. Paul himself.

And whichever state collects the most signatures (as a percentage of population) will win a $1,000 gift certificate to the Campaign for Liberty store.

A recent Rasmussen poll shows that 75% of Americans support a thorough audit of the Federal Reserve, so there are plenty of willing signers out there just waiting to be asked.

With 3 out of every 4 people a supporter, you could gather hundreds of petitions just hitting a few blocks door-to-door!

But collecting the petitions is just the first step.

When the Senators return to D.C. on September 8th, we want to let them know right away that we haven’t let up. We want them sweating as soon as they get back.

So, for the first week (September 8th – 15th), let’s keep their phones ringing off the hook about Audit the Fed. Let’s keep at least one staffer in every office busy from morning to night.

If everyone makes just one call a day, they will be overwhelmed. And believe me, they will get the message.

And that’s when we hammer it home.

On Tuesday, September 15th at 4PM, it’s finally time to deliver those petitions!

Your local leaders are already developing a strategy for the most effective petition drops, so please check your state page for plans and updates.

Similar pressure brought almost two-thirds of the House of Representatives on board with Audit the Fed, and it’s high time the Senate shaped up.

Can you imagine the reaction at each Senate office to hundreds of patriots delivering thousands of petitions, all on the back of a week of non-stop calls and a month of townhall protests?

The effects of displays like these are two-fold, because in addition to putting political pressure on your Senators, they generate local media coverage and help spread the Audit the Fed message to more voters.

Which in turn puts more pressure on your Senators.

So let’s turn up the heat. Gather as many S 604 petition signatures as you can. Hit up the townhall protests and any other liberty-minded rallies.

Remember, the winning signature-gatherer in each state wins a copy of End the Fed and a pocket Constitution, both autographed by Ron Paul.

Not to mention the winning state gets a $1,000 Campaign for Liberty shopping spree!

When the Senators finally retreat to Washington, D.C. on September 8th, call their office daily to ratchet up the pressure for Audit the Fed.

And then, on Tuesday, September 15th at 4 PM local time, we’ll really let ’em have it! We’ll deliver those thousands of petitions simultaneously, in front of news camera and the public eye.

Check your state page for specific petition drop plans for your state.

This Mass Action Movement will be critical in getting Audit the Fed passed in the Senate. I hope you will take the time to join in this winning fight.

In Liberty,

John F. Tate
President

Dear Friend of Liberty,

As you and I both know, Campaign for Liberty is leading the fight to pass Ron Paul’s bill to Audit the Fed. With 282 cosponsors in the House and 23 in the Senate, your efforts have so far proven very successful in establishing large, bipartisan support for Federal Reserve transparency. We’ve come a long way in demonstrating to the nation that monetary policy is a critical issue, and every day more and more people are waking up to the harm that the Fed has caused our economy.

But our mission is not yet complete. There are more Americans to educate, more signatures to collect, and more work to be done to combat the “big guns” that have come out against Ron Paul’s Audit the Fed bill. That’s why today I’m proud to announce that we’ve taken the next step in our efforts by launching AuditTheFed.com, a focused, coalition website with one purpose: to push this historic piece of legislation through Congress, past the President’s desk, and into law.

AuditTheFed.com includes: contact information for your congressman and senators, petitions, widgets, and banners to promote the website, dynamic graphs of the bill’s cosponsors, a detailed summary of the Audit the Fed bill, a list of our growing coalition, a blog to keep you up to date on all the latest Audit the Fed news, a sign up for email updates, and social networks to help get the word out online. This website was designed to put you, the liberty-loving activist, in a position to efficiently and effectively promote Audit the Fed to family, friends, neighbors, and strangers alike.

This new website is the latest addition to our efforts to Audit the Fed, but it is by no means the culmination. Stay tuned to CampaignforLiberty.com in the coming days for information on how we plan to mobilize to gain not only more cosponsors for HR 1207 and S 604, but support for a vote in the House and Senate.

For Liberty,
John Tate

President

P.S. If you are able, please consider donating to Campaign for Liberty today to help ensure Audit the Fed becomes law and we can finally bring transparency and accountability to one of our country’s most secretive institutions.

Representative Ron Paul continues to receive cosponsors on his Audit the Fed bill (H.R. 1207). With 245 cosponsors in total, one has to wonder why this bill has been unable to move ahead in the House for floor debate and an eventual floor vote.

The Senate companion bill (S. 604) offered by Senator Bernard Sanders (R-VT) carries only 3 cosponsors (Senators Mike Crapo, R-ID; Jim DeMint, R-SC; and David Vitter, R-LA). However, the Senate version of the bill had a chance for passage when Senator Jim DeMint (R-SC) opted to attach S. 604 to the Legislative Branch Appropriations Act (H.R. 2918) as an amendment. DeMint’s attempt to force the Senate to consider the bill through the amendment process failed when Senate leaders rejected having a vote on the amendment claiming it violated Senate rules. The appropriations bill passed without a vote on the DeMint amendment, even though the bill had several other provisions for the Government Accountability Office (GAO) to audit various other agencies. (Click here for a video of Senator DeMint’s statement on his amendment.)

This issue cannot be ignored forever. With more and more support to audit the Federal Reserve, congressional leaders will soon have to deal with this issue in one way or another.

Continue to contact Congress and urge them to support H.R. 1207 and S. 604. If your representative and senators are co-sponsors already – GREAT! If not, you should continue to call, e-mail, or visit their office. Let them know that you support a complete audit of the Federal Reserve and that you wish for them to become a sponsor of either H.R. 1207 or S. 604.

Thank you,
Your friends at The John Birch Society

July 6, 2009

Dear Friend of Liberty,

Earlier today, the first shot in our battle to pass Audit the Fed through the U.S. Senate was fired on the Senate floor by Senator Jim DeMint of South Carolina.

Senator DeMint, who has a well-deserved reputation for taking the battle to the other side in the Senate, once again proved why he is such a valuable ally in our fight to bring transparency and accountability to the Federal Reserve.

A little while ago, the Senate voted to pass HR 2918, the Legislative Branch Appropriations Act. This $3 billion bill contains, among many other things, provisions for GAO audits on certain agencies.

Seizing on a chance to take quick action to bring Audit the Fed up for a vote, and with the GAO provisions in mind, Senator DeMint attached the full text of S 604, the Senate version of Ron Paul’s Audit the Fed bill, to HR 2918 as Senate Amendment 1367 before it was considered for final passage.

However, Senate Democrats refused to even allow a vote on the amendment! That’s right. The internationalist, Fed-loving elite in the Senate used a parliamentary tactic to shut down DeMint’s amendment.

After Senator DeMint brought Audit the Fed to the floor, Senator Ben Nelson of Nebraska raised a “point of order” to prevent a vote, claiming that the amendment violated Senate Rule 16 by “legislating” on an appropriations bill. The Senate president agreed, and the amendment was shot down.

Senator DeMint did not back down, though, and directly challenged Senate leadership by pointing out the other GAO audits contained in the bill. As Senator DeMint listed them off, the Senate president was forced to agree with Senator DeMint that each one he described, all of which would be left in for final passage, also violated Senate Rule 16.

Which tells us at least one thing: the problem wasn’t with “legislating” on the bill or violating Senate Rules (which is commonly done). Shooting down the amendment was about preventing a thorough audit of the Federal Reserve for the first time in its history!

Senate leadership is hoping this issue will just fade away so they can get on to what they deem to be more “important” business, like dictating what kind of healthcare plan you and I can carry or passing destructive Cap-and-Tax legislation.

But the American people deserve answers on what the Fed has done with trillions of our tax dollars and what they are committing us and future generations to as part of their secret deals with foreign central banks and governments.

The leadership decided today to turn their backs on transparency, but our fight is just beginning.

As Senator DeMint made clear on the floor, the Audit the Fed bill has wide bipartisan support. He rightly warned the Senate that even if they delay today, they WILL have to deal with the issue on the floor.

It is up to you and me to back up Senator DeMint’s words by making sure the momentum continues to build and the bill comes up for a final vote.

The rejection of the Audit amendment is just the first battle in our war. Now is the time to really put the pressure on the U.S. Senate to Audit the Fed!

Senator DeMint fired the opening salvo and showcased the hypocrisy of the Senate for allowing other GAO audits to be included in the bill while refusing to even allow a vote on Fed transparency.

Again, we’re just getting started. Senator DeMint will keep fighting to pass Audit the Fed on its own or as an amendment, and we need to continue putting pressure on our senators to do everything in their power to achieve a floor vote!

Visit our Audit the Fed action page for contact information to call, write, and fax your senators and urge them to support S 604 and to push for a final vote.

Together, we will finish this fight to Audit the Fed!

In Liberty,

John Tate

President

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 . Also, please do not hesitate to contact me again if I can help in any way. You can reach my office in Washington at 202-225-4276, my office in Doylestown at 215-348-1194, and my office in Bristol at 215-826-1963.

Sincerely,

Patrick J. Murphy
MEMBER OF CONGRESS

By Stephen C. Webster

After months of activism and lobbying by Congressman Ron Paul’s supporters, House Resolution 1207, the Federal Reserve Transparency Act, will move out of committee to be debated by the full House of Representatives.

In a show of cross-party unity, Ohio Democratic Congressman Dennis Kucinich became the bill’s 218th co-sponsor, pushing it over the threshold for debate in Congress.

The bill, which achieved its 222nd co-sponsorship on Thursday, has been in consideration by the House Financial Services Committee since Feb. 26.

Congressman Kucinich, along with Rep. Edolphus Towns (D-NY), announced Tuesday that the House Financial Services Committee will subpoena the Federal Reserve to ascertain the details of the Fed’s agreements with Bank of America in the institution’s acquisition of Merrill Lynch.

“The full committee and Domestic Policy Subcommittee, under the leadership of Chairman Dennis Kucinich (D-OH), have been investigating the circumstances surrounding the federal government’s bailout of the Bank of America-Merrill Lynch transaction,” Kucinich’s office noted in a Tuesday release. “Specific documents subpoenaed include emails, notes of conversations and other documents.”

While the bill enjoys some Democratic supporters, the vast majority of H.R. 1207 co-sponsors are Republican.

“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 in a Thursday media advisory. “I look forward to this issue receiving greater public exposure.”

Though the move from committee to full House is sure to hearten supporters, the Senate also has pending before it a bill which would have originally given Congress greater oversight of the Federal Reserve. But in its present form, notes Huffington Post writer Ryan Grim, a recent, every-so-slight modification essentially ‘neutered’ the bill.

“Thanks to an overlooked document posted on the website of Sen. Charles Grassley of Iowa, the top ranking Republican on the Finance Committee, voters can virtually watch the water being dumped into the brew that Grassley had hoped to force the Fed to drink,” he wrote.

“On page five of Grassley’s amendment, he intends to give the Comptroller General of the Government Accountability Office power to audit “any action taken by the Board under…the third undesignated paragraph of section 13 of the Federal Reserve Act” — which would be almost everything that it has done on an emergency basis to address the financial crisis, encompassing its massive expansion of opaque buying and lending.”

Grim adds: “Handwritten into the margins, however, is the amendment that watered it down: ‘with respect to a single and specific partnership or corporation.’ With that qualification, the Senate severely limited the scope of the oversight.”

Congressman Paul, in defense of his proposal to audit the bank which controls America’s currency, argues not just for transparency. He wants to close it down.

“Detractors have […] argued that the Fed must remain immune from the political process, and that that more congressional oversight would distort their very important decisions,” Paul wrote in an editorial titled, ‘Audit the Fed, Then End It!’ “On the contrary, the Federal Reserve is already heavily entrenched in the political process, as the Fed chairman is a political appointee. High-level officials routinely make the rounds between positions at the Fed, member banks, Treasury and back again, taking care of friends and each other along the way.”

He continued: “As far as the foolishness of placing complex monetary policy decisions in the hands of politicians – I couldn’t agree more. No politician or central banker, no matter how brilliant, is smart enough to know more than the market itself. The failure of central economic planning has been witnessed over and over. It is frankly beyond me why we ever agreed to try it again.

“To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have. They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability. Thus the loudest arguments against greater transparency are likely to come from those friends, and understandably so.”

By: CNBC.com | 10 Jun 2009 | 09:55 AM ET

The Federal Reserve’s balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant’s Interest Rate Observer, told CNBC.

With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.

“If the Fed examiners were set upon the Fed’s own documents—unlabeled documents—to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down,” he said. “The Fed is undercapitalized in a way that Citicorp is undercapitalized.”

Grant said he would support legislation currently making its way through Congress calling for an audit of the Fed.

Moreover, he criticized the way the Fed has managed the financial crisis, saying the central bank’s target rate should not be around zero.

“I think zero is the wrong rate for almost any economy,” Grant said, adding the Fed has “embarked on a vast experiment in moral hazard. Interest rates are the traffic signals in a market economy, and everything’s green. … You have to wonder whether these interest rates are the right clearing rate or rather they are the imposition of a central bank.”

Amid a disparity between analysts predicting there will be no rate hikes soon and the fed funds futures indicating tightening by the end of the year, Grant said he thinks the Fed indeed will begin raising rates as inflation creeps into the picture.

Fed funds futures have fully priced in as much as a half-point rise in the target rate from its current range of zero to 0.25 percent.

“If the hairs on the back of your neck stand up when there’s too much unanimity of opinion, then one begins to worry about this,” he said. “The Fed proverbially has been late.”

By Scott Lanman

June 9 (Bloomberg) — The Federal Reserve was subpoenaed by the House Oversight Committee for e-mails and documents related to Bank of America Corp.’s purchase of Merrill Lynch & Co. after the panel was unable to obtain them through a request last week.

The central bank will comply and seeks confidentiality for the information, a Fed official said today on condition of anonymity. The panel said it wants to secure the Fed documents for a hearing scheduled for June 11, and Bank of America Chief Executive Officer Kenneth Lewis has agreed to testify.

The move is part of increased congressional scrutiny of the central bank, which helped craft a government aid package enabling Bank of America to absorb Merrill Lynch in January. Lewis told New York state investigators in February that he was pressured in December by Bernanke and former Treasury Secretary Henry Paulson to complete the Merrill acquisition amid mounting losses at the brokerage firm.

“It does sound like the parties aren’t getting along,” said Oliver Ireland, a former Fed counsel who is now a partner at Morrison & Foerster in Washington. It’s “unusual” for Congress to subpoena information on bank supervision from the Fed, he said.

The committee served the subpoena today, Jenny Rosenberg, a spokeswoman for the panel, said in a telephone interview. The central bank received the subpoena, the Fed official said.

Committee Chairman Edolphus Towns, a New York Democrat, and Ohio Representative Dennis Kucinich, chairman of the domestic policy subcommittee, sent Bernanke a letter this month requesting 43 items, including e-mails from Bernanke and other officials, meeting notes and the Fed’s analysis of the companies’ merger.

Withheld Documents

The Fed “refused” to provide the documents, resulting in the subpoena, California Representative Darrell Issa, the panel’s senior Republican, said in an e-mailed statement today.

In an April letter to Kucinich, Bernanke said the Fed “acted with the highest integrity” during its discussions with Bank of America on Merrill Lynch and didn’t seek to withhold any information from the public on Merrill Lynch’s losses.

Bernanke said in the letter that information collected by the Fed up to that point consisted of “confidential supervisory information or confidential business information, both of which have traditionally been regarded as material that should not be made public, especially in the case of institutions that continue to operate.”

Ranking Republican

Towns and Issa agreed to the subpoena today, the panel said.

“The marriage between Bank of America and Merrill Lynch was a shotgun wedding pushed by the Federal Reserve,” Issa said in his statement.

Bank of America acquired the brokerage on Jan. 1.

Bernanke said in February that Bank of America had sufficient time to study its acquisition of Merrill Lynch from September until mid-December, when Lewis asked about canceling the transaction. “We didn’t see any realistic legal way to break the deal,” Bernanke said at the time.

Bank of America has sold $45 billion in preferred shares to the U.S., more than any other bank except Citigroup Inc. The bank agreed to a loss-sharing plan with federal regulators in January on $118 billion in assets, mostly involving securities held by Merrill Lynch. Bank of America in May said it is negotiating to end that agreement because improving credit market conditions make the protection unnecessary.