WSJ: House Attacks Fed, TreasurySubmitted by dexterszyd on Thu, 11/19/2009 - 21:48
House Attacks Fed, Treasury
Panel Votes for Tighter Political Rein on Central Bank; Some Call for Geithner to Quit
By SUDEEP REDDY and DAMIAN PALETTA
WASHINGTON -- Political frustration over the rescue of Wall Street and high unemployment erupted in Congress Thursday, with one committee threatening to impose tighter scrutiny on the Federal Reserve and another excoriating Treasury Secretary Timothy Geithner.
The House Financial Services Committee voted, 43-26, to approve a measure sponsored by Texas Republican Ron Paul, vociferously opposed by the Fed, that would direct the congressional Government Accountability Office to expand its audits of the Fed to include decisions about interest rates and lending to individual banks. The Fed says the provision threatens its ability to make monetary policy without political interference.
The vote was the latest blow to the central bank, which has been become a lightning rod for politicians responding to popular anger that Wall Street was bailed out while the public was not. The Fed faces a stinging backlash from legislators from both parties who argue that has too much power and too little oversight. On Thursday, the Senate Banking Committee began debating legislation that would largely remove the Fed from bank supervision over the objections of both the Fed and the Obama administration.