Sanders’ Audit-the-Fed measure passes — unanimously

SANDERS’ AUDIT-THE-FED MEASURE PASSES — UNANIMOUSLY…. As recently as last week, opposition to Sen. Bernie Sanders’ (I-Vt.) measure to audit the Federal Reserve was still pretty strong. But on Thursday, there was a breakthrough — Sanders tweaked his proposal and quickly garnered the support of the Democratic leadership and the White House.

In particular, Sanders agreed to limit the scope of the audit a bit, but still require the Government Accountability Office to scrutinize all the Fed’s emergency lending dating back to December 2007.

In a result that was hard to predict, the Senate approved Sanders’ proposal today — unanimously.

The 96-0 vote came after Sen. Bernie Sanders (I-Vt.) modified an earlier version of the audit legislation that was strongly opposed by the White House and Federal Reserve. They argued the amendment would compromise the independence of U.S. monetary policy.

The Sanders amendment would require a new audit of the Fed’s emergency lending during the financial crisis and a new audit of the central bank’s governance.

It’s just not common for a proposal that draws the ire of industry lobbyists to win on a unanimous vote. I guess opponents had trouble thinking of a rationale to vote against it.

The result is a proposal that’s not quite as ambitious as originally planned, but which will still produce more Fed transparency, and a full accounting of the Fed’s emergency lending, including loans to AIG and Bear Stearns.

The entire effort was considered something on the “fringe” for quite a while. Now it’s poised to get a new label: law.