‘Audit the Fed’ Bill’s Prospects Unclear-wsj 2/6 : 미연방 상원 FRB 회계감사 법안 제의 배경과 향후 전망

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Kate Davidson

The Marriner S. Eccles Federal Reserve building in Washington, D.C.

Bloomberg News

An effort to expand congressional oversight of the Federal Reserve‘s interest-rate decisions is generating buzz on the presidential campaign trail and in Washington, but its prospects on Capitol Hill remain uncertain.

Sen. Rand Paul (R., Ky.) last month reintroduced legislation that would subject the central bank to more congressional scrutiny and appeared at an “Audit the Fed” rally in support of the bill on Friday in Iowa. The measure has 30 co-sponsors, including Sens. Ted Cruz (R., Texas) and Marco Rubio (R., Fla.). All three men are considering presidential bids in 2016.

Fed governor Jerome Powell is set to deliver a speech on Monday about the bill and other related proposals. Presidents of several of the Fed’s regional reserve banks have spoken out in recent days in opposition to the measure, echoing Fed Chairwoman Janet Yellen‘s concerns that the bill could interfere with the central bank’s ability to do its job free of political pressure.

The House passed a similar bill in the last Congress, but it went nowhere in the Senate, which was then controlled by Democrats. The proponents’ hopes were boosted when Republicans took control of the upper chamber this year.

The legislation’s fate, however, depends largely on Senate Majority Leader Mitch McConnell (R., Ky), who ultimately controls whether or when the Senate will vote on it. He is a co-sponsor of the bill, but it’s unclear whether it’s a priority for him at a time of many other competing demands.

A McConnell spokesman couldn’t provide any updates about when the bill would make it to the Senate floor, or whether it might be offered as an amendment to other legislation.

Several financial industry lobbyists said Mr. McConnell has a slew of other measures he wants to advance first, including bills to fund the Department of Homeland Security and extend the Highway Trust Fund and nominations for the Justice and Defense departments. He will also be under pressure to respond to bills sent over by the House, including legislation to repeal the Affordable Care Act.

“Taxpayers deserve to know what government agencies are doing in their name,” Mr. McConnell tweeted the day after Mr. Paul introduced the bill.

Senate Banking Committee Chairman Richard Shelby (R., Ala.), who isn’t a co-sponsor, has expressed interest in holding a hearing on the issue but hasn’t scheduled one, a spokeswoman said.

The White House says congressional oversight of Fed policy could undermine its independence. “We think it is important that we not have any encroachments on the independence of the central bank that would result in monetary policy decisions that affect the long-term health of the economy being influenced by short-term political pressures,” White House spokeswoman Jennifer Friedman said about the legislation.

Even if President Barack Obama wanted to veto it as a standalone measure, he might face a tough decision if Republicans passed it as an amendment to another measure with wide support.

Congress did this last year when it amended a bill extending the Terrorism Risk Insurance Act to include a provision earmarking a seat on the Fed board for someone with community banking experience. Mr. Obama signed it into law.

Mr. Paul’s legislation directs the Comptroller General to complete an audit within one year of the bill’s enactment and to issue a report of its findings to Congress. It doesn’t define what is meant by an audit.

The financial statements of the Fed board and reserve banks are audited each year by an outside firm. The Government Accountability Office and Fed inspector general also regularly review its activities.

Mr. Paul said in his speech on Friday in Iowa that the Fed’s bookkeeping and monetary policies could lead to serious economic troubles, saying only an audit could sort out its current state “I think there needs to be some sunshine. I’m going to fight ’em, and we’re going to get a vote on audit the Fed,” he said to applause from the crowd.

The bill is causing angst for the Fed and some investors, in part because it comes at such a sensitive time–right as the central bank weighs whether to begin raising interest rates this year.

“There is a lot of evidence to suggest that more politicized central banks deliver worse economic outcomes on both growth and inflation,” said Michael Feroli, the chief U.S. economist for J.P.Morgan Chase. “If you were to see this pass, it would be viewed as a step toward monetary policy becoming more politicized.”

Enacting the bill “would be a tremendous mistake because it would ultimately lead to poorer economic performance,” Cleveland Fed President Loretta Mester said Wednesday in a speech in Ohio.

Some economists and financial executives said subjecting the Fed’s monetary policy decisions to greater congressional scrutiny would cause investor heartburn and could disrupt markets.

If the bill were to pass, Mr. Feroli said, investors would probably show less preference for U.S. assets and more preference for assets in places where policy is viewed as less politicized. That likely would be reflected in equity prices, in the value of the dollar and in most financial assets, he added.

Chris Krueger, an analyst with Guggenheim Securities LLC, said the bill represents “one of the largest DC-created tail risks for the markets this year,” meaning it has a low probability of taking effect but could do damage if it did.

Mark Calabria, a former Shelby aide and Cato Institute fellow who supports the Audit the Fed bill, said a Senate hearing could make a big difference, if the Fed is able to convince members the bill could disrupt markets.

“I don’t at this point think the Fed has a lot of credibility with members on this, but I think there are a number of members who are on the fence,” he said.

–Byron Tau contributed to this article.