Ben Margot, File, Associated Press
FILE - In this April 5, 2012 file photo, Rep. Ron Paul, R-Texas speaks at the University of California at Berkeley, Calif. The House has voted to give Congress greater scrutiny over the Federal Reserve, approving legislation sponsored by longtime Fed nemesis Rep. Ron Paul. The legislation requires the Government Accountability Office to carry out comprehensive audits of the bank. It passed easily but faces an uncertain future in the Senate.
Perhaps it was a farewell gesture to Ron Paul, who, after serving in Congress three different times and running for president three times, is retiring at age 76.
The House finally approved legislation long sought by the libertarian Republican, a bill calling for a comprehensive audit of the Federal Reserve and its 12 regional banks.
Paul has been a longtime proponent of dismantling the central bank, saying in a statement, "If Congress were really serious about limiting the size of government, it would eliminate the most important enabler of government profligacy by ending the Fed."
Basically, the Fed is in charge of the nation's monetary policy, playing a central role in controlling the money supply and setting interest rates and keeping the dollar competitive against other currencies.
The Fed is already subject to a number of annual audits and the minutes of the deliberations of its board of governors are a matter of public record, although on a delayed basis.
The Fed doesn't object generally to the audit but it objects vehemently to audits that would demand documents by Fed policymakers on the pros and cons of supporting changes in interest rates, decisions that affect everything from home mortgages to car loans to saving accounts.
Chairman Ben Bernanke said it would be a "nightmare scenario" that could open up the Fed's deliberations to political interference from Congress and the White House. Being able to open a spigot of cash would be a powerful political tool but one dangerous to the economy's health.
However far the Paul bill goes, Congress must insure that nothing jeopardizes the independence of the Fed and or is even seen as an encroachment on its economic impartiality.