Oct. 30 (Bloomberg) -- Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.
The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff, Paul said today.
“There’s nothing left, it’s been gutted,” he said in a telephone interview. “This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that.”
The Fed, led by Chairman Ben S. Bernanke, has come under greater congressional scrutiny while attempting to end the financial crisis by bailing out financial firms and more than doubling its balance sheet to $2.16 trillion in the past year. The central bank is also buying $1.25 trillion of securities tied to home loans.
Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee.
Keith Kelly, a spokesman for Watt, declined to comment and said Watt wasn’t immediately available for an interview. Watt’s district includes Charlotte, headquarters of Bank of America Corp., the biggest U.S. lender.
Paul said he intends to introduce an amendment to the bill when it comes to the House floor for a vote restoring the legislation’s original language.
Excerpted from pp. 44-46 of The Great Derangement
[W]hen you’re looking at the process by which any bill gets passed into law, on the House side at least there are only a few people who really matter. Those people are the majority leader, the chairman of the relevant “committee of jurisdiction” (i.e. Energy and Commerce for the oil industry, Financial Services for Wall Street firms, etc.), the chairman of the Rules Committee, the chairs of the House-Senate conference committee, the House Speaker and perhaps a few other members of the conference committee.
These people are important because this small group can essentially ram a bill into law all by themselves. If you control all of these seats, you control every space on the congressional Monopoly board within which the bill can be written or altered unilaterally.
There are four main way stations on the road to a bill’s passage. There’s the committee of jurisdiction, where the bill, after being introduced, goes through what is called a markup process. In a markup, the committee decides what goes in the bill and what does not. The markup process is supervised by the committee chairman. Theoretically the markup process is put to a general vote by the committee, but in this Congress the reality is that the chairman puts in what he wants and chucks what he doesn’t want out the window.
He then sends the bill to the Rules Committee, where other House members from outside the committee – usually freaked-out minority members desperate to stop this or that criminally insane provision cleverly hidden in the committee version – have a chance to submit amendments to the bill. The Rules chairman tries not to laugh, somberly nukes every meaningful amendment request with a pained, regretful expression, and then takes the bill behind closed doors, where it can be rewritten (usually in the middle of the night) to include all the shit the House leadership knew was way to evil to survive public discussion in the original committee of jurisdiction.
Rules then puts the finishing touches on the bill’s language and sends it to the floor the very next morning. The version that leaves the rules committee is now called not a bill, but a rule. The Rules Committee is supposed to give House members three days to read the rule before it goes to a vote, but the three-day period can be waived in case of emergency. The “emergency” has been in place for five consecutive years now; virtually every bill that has passed through the house in the Bush era has been voted on just hours after emerging from the hairy womb of the Rules Committee.
After the House passes the rule, which of course no one voting on it has read, the world then waits for the Senate to pass its own hideous version of the legislation. But alas, the bill cannot be sent to the president until the differences between the House and Senate versions – consisting generally of differing sets of campaign donor hand-jobs hidden in the two bills – can be ironed out. This ironing out is done in the conference committee.
The mechanism of conference committee is a special voodoo all unto itself, a monstrously complex bureaucratic maze whose diabolical scheme is known to a select few congressional practitioners. But for the moment, only two facts are important.
The first is that the bill can again be completely rewritten here, rewritten from top to bottom, rewritten even so that it has a completely opposite meaning from the bills that passed the two houses – in a word, re written in such a fashion as to render the whole process up to now meaningless.
The second is that a majority vote of conference committee members, called “conferees,” is not even required for passage. Again, the conference committee chairs are the key players here. Whatever the top dogs from the House and the Senate want generally occurs. They redo the bill according to whatever swinish commercial dynamic happens to govern this back-room deal (for the conference hearings are almost always conducted out of the public eye), then send the final version for a vote, again giving the members just a few hours’ notice before they make an essentially blind decision on the by-now completely revised legislation.
Somewhere along the line, campaign donors apparently figured out that by a careful stewarding of their contributions, they could – instead of spending gargantuan sums to buy the wide majority of House and Senate members necessary for an open vote on the floor – instead target those members who could simply rewrite the important parts of the bill in secret.