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Fed Audit Compromise Amendment Praised By Fed Critics

First Posted: 07/07/10 06:12 AM ET Updated: 05/25/11 05:25 PM ET

Bernanke

A trio of prominent economists said in an email to HuffPost on Friday that the compromised version of an amendment to audit the Federal Reserve would still be a "great victory."

Economists Robert Auerbach, James Galbraith and Dean Baker said in a statement that the amendment, sponsored by Sen. Bernie Sanders (I-Vt.), "calls for an audit of a broad array of items that include deliberations in the back room of the New York Federal Reserve Bank. Senator Sanders was precise in including some of the events from the backroom of the Fed that he wants audited under this amendment. The Congressional intent is clear."

Sanders struck a deal with Fed backers on Thursday to allow the bill to see a vote on the Senate floor. The Fed and the White House waged an intensive lobbying effort to block the amendment.

Rep. Ron Paul, the Texas Republican and longtime Fed critic who co-sponsored the audit-the-Fed measure that successfully passed the House, said in a YouTube video on Thursday that Sen. Bernie Sanders (I-Vt.) had ruined his bill.

"I'm not a bit surprised that the Federal Reserve got to the Senate," Paul said. "At the last minute, [Sanders] switched it and watered it down, and really it adds nothing. It's a possibility that it even makes the current conditions worse."

Auerbach, Galbraith, and Baker -- authors of astrongly-worded letter urging the White House to back off -- disagree:

"This kind of transparency is needed from the country's most powerful peacetime bureaucracy. It enhances the polices of the Fed while secrecy impairs public confidence in their actions, especially in times of financial crisis."

A Democratic leadership aide said there will probably be a vote on the amendment on Tuesday.

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