Helping Families Save Their Homes Act Of 2009 - Continued

Floor Speech

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Mr. GRASSLEY. Madam President, I rise to speak on an amendment I have offered, 1021. It will have Democratic and Republican cosponsors. This substitute amendment gives the Government Accountability Office authority to audit the Federal Reserve.

However, this version limits the Government Accountability Office's new authority to matters involving the Federal Reserve's participation in the TARP or its emergency action under section 13(3) authority.

This is a much narrower version of the original amendment. It is intended to address the Federal Reserve's concern that its core monetary policy functions remain independent of the Government Accountability Office scrutiny.

For over 90 years, the Fed has conducted monetary policy through a combination of open-market operations and changes in banking reserve requirements. On rare occasions, the Fed has invoked its authority under section 13(3) to take extraordinary action to address what they would decide was a very short-term crisis. While these actions are intended to be temporary, they can have a lasting impact on specific institutions and on the long-term credibility of the Fed.

The Fed has created a number of facilities that are making nonrecourse loans or buying and selling assets through a subsidiary of the Fed. These transactions involve undisclosed counterparties. Without adequate oversight, no one will ever know the terms or conditions of these transactions: Who received what from the Fed and what did the Fed receive in return? How much did each of those entities profit and how much did the taxpayers lose?

This amendment is simply about accountability, not monetary policy, because I do not want to interfere in Fed monetary policy. But I do think that when we are helping out businesses, the way we are, sometimes through appropriations from Congress, sometimes through facilities and powers of the Fed, we are talking about taxpayers' money.

If you think the Fed does not have anything to do with taxpayers' money, remember that last year they returned, I think it was, $38 billion to the Federal Treasury--I know it was in the mid-30s that it returned to the Federal Treasury in year-end operations.

They are not going to be able to do that this year, but that $38 billion goes into the general fund to be used, like money being fungible. It is not seen by the taxpayers any differently from the income tax or the payroll taxes that are paid. There is an interest in protecting the taxpayers' money. It is not an interest in doing anything with the independence of the Fed, it is just a matter of knowing who is getting helped, what is being helped, are they profiting, how much are they profiting, and the extent to which the taxpayers are being protected, the instruments the Fed takes in as collateral. These are things that it is good to know. We need to know. We need to know them. Why? Because there are a lot of facilities, institutions, companies being helped that would be belly up--well, I guess you would say they are belly up or they would not need the help--but belly up and they exist because of either Congress appropriating money or because of the Fed intervening.

All good reasons maybe but they operate. So, in my judgment, the public's business ought to be public. Oh, there are some exceptions, such as intelligence information, national security, some privacy. But everything else ought to be public. That is what this amendment is all about. It is all about making sure money is handled responsibly.

The Fed is only supposed to lend money against good collateral. Their authority to conduct monetary policy must not be allowed to degenerate into a taxpayer-funded bailout for those who engage in reckless lending.

I hope people who are going to be voting on this amendment tomorrow will consider what we are trying to do. We are trying to do everything this President said in his campaign--the President has not spoken on this issue, but I am speaking in a general way about what the President said in his campaign--that he wanted more transparency in Government, he wanted more accountability in Government.

For the most part, the President, through various things, maybe not completed yet, has tried to deliver on that promise--putting TARP expenditures on the Internet, for instance, so anybody in the United States can know, maybe not today but eventually, where every penny went--because it is the taxpayers' money. This Government belongs to the American people. What this Government does that affects the pocketbooks of Americans ought to be made public.

This amendment is not something to try to destroy anything. It is not something trying to get involved in that which affects the monetary policy of the Fed. We are just trying to get information out and make sure people are accountable. We have to have this information to know that. It doesn't hurt one iota to make sure the public has access to this information. I hope Members will support amendment No. 1021 tomorrow.

There is another amendment which, it is my understanding, the managers will accept. But 1021 we will have to have a vote on. I have given my reasons. I may take a minute in the morning to expand on that and remind Senators, but I hope we can move forward and get this agreed to.

I yield the floor.

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