by Randy Forbes

Every day, an entity in Washington makes powerful decisions over our economy and monetary policy. Yet, it shares very little information about its day-to-day decisions, the influences it is subject to, and the ways in which these decisions affect the American people. The entity is the Federal Reserve, and it needs more oversight.

Congress established the Federal Reserve System in 1913 to add some consistency to the economy after a series of financial panics brought instability to the banking industry. Since that point, the Federal Reserve — commonly referred to as the Fed — has evolved in its governance and mission. Twice a year, the Federal Reserve Board must report to Congress on the economy and monetary policy in the United States. However, the Fed has largely enjoyed a certain level of autonomy over monetary policy and lending — the Government Accountability Office (GAO) is prohibited from including some information from its review. Especially now with our nation’s staggering deficit, a full audit of the Fed — with no exclusions — is imperative, not optional.

Last month, I voted for the Federal Reserve Transparency Act (H.R. 24), a bipartisan bill that requires the GAO to conduct a full audit of the Federal Reserve within one year. Here’s why:

In its 101-year history, the Federal Reserve has never had a complete, independent audit. Throughout its history, the Federal Reserve has consistently expanded its reach. The quasi-government entity sets monetary policy. It issues paper and coin currency. It controls interest rates. It serves as a bank to bankers and a bank to the federal government. Yet, despite its vast reach into monetary policy, there has never been a comprehensive audit because many of its operations are exempt from regular audits. That means we have 101 years of layers to peel back to fully understand how the authority of the Fed has changed, and to what extent they are exercising their power to practice emergency lending, set monetary policy, or operate with foreign central banks and international organizations.

The Federal Reserve’s budget is not subject to review by Congress. According to the Congressional Research Service, unlike most other government agencies, the Federal Reserve is self-financing and there is no congressional oversight over its budget. That means, since its budget is not subject to the usual appropriations or authorization process, there is no regular avenue for Congress to ensure the Fed is allocating resources according to congressional priorities — underscoring both the lack of transparency over the entity and the lack of accountability to the people’s representatives.

Seven unelected bureaucrats run the Federal Reserve. The Fed is led by a Board of Governors. These seven unelected, presidential appointed members guide the Fed’s policy actions, serving 14-year terms. They largely enjoy decision-making autonomy with little scrutiny because many of their actions are excluded from annual, comprehensive audits.

The Government Accountability Office has limited authority to examine the actions of the Federal Reserve. Under current law, the GAO is tasked with regularly reviewing the actions of the Federal Reserve. However, the GAO is restricted from examining the actions of the Fed related to decisions on monetary policy and transactions with a foreign bank or foreign government.

Seventy-four percent of Americans favor auditing the Federal Reserve, according to a November 2013 Rasmussen poll. Americans are demanding transparency and accountability in Washington. It’s time Washington aligned its priorities with those of the American people.

Transparency, accountability, and responsibility are fundamental characteristics that government agencies and departments are obligated to possess in order to effectively serve the American people. Especially now as the Fed has grown in its influence in the private sector, it’s time we lift the veil from this mammoth organization. To achieve real transparency, we need a full audit of the Fed – no exceptions. Just as, to achieve real accountability, we need a full audit of the Department of Defense — no exceptions. It’s common sense.

RANDY FORBES represents Virginia’s Fourth Congressional District in the United States House of Representatives. For contact information, see http://randyforbes.house.gov.