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"Independent" Fed Lobbies GOP Against Audit

Because nothing says "independence" like snuggling up to the newly Republican-controlled Congress. Having, in recent years, been accused of being too closely aligned with Democrats, WSJ reports that the Fed's "Liaison Office" - which lobbies for the bank's interest on Capitol Hill - has begun cultivatinmg relationships with the GOP in a desperate bid to evade Rand Paul's "Audit The Fed" Bill.


As The Wall Street Journal reports,

As the Federal Reserve prepares to begin raising interest rates later this year, it is readying for what may be another big challenge in 2015: the shift to a Republican-controlled Congress.


The Fed’s only Republican governor, Jerome Powell, has begun making the central bank’s case to the GOP, in public and private, against proposals Fed officials say could limit its independence. And the bank has hired and promoted Republicans within its Congressional Liaison Office since the November midterm elections, when the GOP won enough seats to take control of the Senate from the Democrats and expand its House majority.


It is unclear whether these efforts will overcome the perception among many Republicans that the liaison office, which lobbies for the bank’s interests on Capitol Hill, has in recent years been too closely aligned with Democrats, and hasn’t done enough to cultivate relationships within the GOP, according to current and former Hill staffers and financial-industry lobbyists.


In a speech Monday, Mr. Powell laid out his objections to GOP-backed proposals that he said would threaten Fed independence, including legislation to expand congressional oversight of the bank’s interest-rate decisions. Advocates of the proposal say it would bring more transparency to policy decisions.

The so-called Audit-the-Fed bill, introduced by Sen. Rand Paul (R., Ky.), “risks inserting the Congress directly into monetary policy decision making, reversing decades of deliberate effort by the Congress to insulate the Fed from political pressure in carrying out its day-to-day duties,” Mr. Powell said.


The Fed last month hired Mike Lee, a former senior Republican economist on the Senate Banking Committee under Sen. Mike Crapo (R., Idaho), to join the Congressional Liaison Office, as well as Mark Libell, the former legislative director for retired Sen. John D. Rockefeller IV (D., W.Va.), who joined the office in December. And it promoted Jennifer Gallagher, a former aide to Sen. Judd Gregg (R., N.H.) on the Banking Committee, to the No. 2 position in the office.

The new hires are only filling existing positions. But the changes signal the Fed may be trying to shift its focus to Republicans after years of tilting toward Democrats while they controlled the Senate, said one Republican Senate aide .

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And that is the reason why we need to audit the Fed!!