House Committee approves plan to oversee Federal Reserve

Texas Congressmember Ron Paul is celebrating after a House Committee approved his "Audit the Fed" bill - a provision to more closely scrutinize the Federal Reserve. Paul, an advocate of abolishing the Federal Reserve, has been working on this issue for decades. He teamed up with Florida Democrat Alan Grayson on the provision. With a vote of 43 to 26, the House Financial Services Committee approved adding it to the financial reform package. Paul  - also author of the book End the Fed, spoke Thursday before the vote:

“This is what transparency is all about - who's benefitting and where are the trillions of dollars going. We're not talking about a couple hundred billion dollars.  We're talking about a portfolio of trillions of dollars and there's very little that's known about it.”

The Paul-Grayson amendment would allow for the first independent audit of the Federal Reserve since it was created almost a century ago. It would give the General Accountability Office wide latitude in reviewing and auditing the Federal Reserve, including the recent bank bailouts, how it sets interest rates and relationships with foreign central banks. Critics of the reserve say it's always operated in secret, and this provision will bring about much needed transparency. Fed Chair Ben Bernanke and other critics say it could be destructive to the financial system and insist the Fed must maintain its independence.