06/22/2009 01:06 pm ET Updated Dec 06, 2017

238 Members of Congress Disagree with Obama: The Fed Needs More Accountability

At a time when many are questioning President Obama's commitment to transparency, he has announced that he wants to give more power to oversee systemic risk in the economy to the very non-transparent Federal Reserve:

Obama, in an interview shown on the CBS Early Show, said the administration wants an overseer that "is accountable and clear when it comes to these large systemic firms that could potentially bring down the entire financial system. The Fed has the expertise and the credibility I think to do it."

Asked whether lapses by the Fed contributed to last year's crisis, Obama said, "It wasn't the Fed where regulations broke down here."

But a majority of Congress disagrees that the Fed is "accountable and clear," and there are now 237 bipartisan cosponsors of Ron Paul's H.R. 1207, the Federal Reserve Transparency Act, which would give the GAO the authority to audit the Fed and report its findings to Congress.

Many grew concerned when Federal Reserve Inspector General Elizabeth Coleman testified before Congress and could not say which banks had received trillion dollars in Fed lending, what losses the Fed had suffered on its $2 trillion portfolio, did not know that the Fed engages in trillions of dollars in off-balance-sheet commitments, and had no plans to investigate role of the Fed in allowing the collapse of Lehman Brothers.

The video of her appearance has been viewed on YouTube over 820,000 times:

As Rep. Alan Grayson said in a letter to his colleagues, asking them to cosponsor the bill:

[T]he Federal Reserve has refused multiple inquiries from both the House and the Senate to disclose who is receiving trillions of dollars from the central banking system. The Federal Reserve has redacted the central terms of the no-bid contracts it has issued to Wall Street firms like Blackrock and PIMCO, without disclosure required of the Treasury, and is participating in new and exotic programs like the trillion-dollar TALF to leverage the Treasury's balance sheet. With discussions of allocating even more power to the Federal Reserve as the 'systemic risk regulator' of the credit markets, more oversight over the central bank's operations is clearly necessary.

As a result of Grayson's efforts to whip cosponsors, 47 have signed on in the past two weeks alone, including Donna Edwards, Carol Shea-Porter, Jackie Speier, Dennis Kucinich, Heath Shuler, Jim McGovern and Jared Polis.

Grayson's efforts to bring accountability to the Fed have also been endorsed by 5780 people including Dean Baker, Naomi Klein, Bill Greider, Tyler Durden, Bill Black and Jamie Galbraith.

Barney Frank, Chairman of the House Financial Services Committee, has promised that there will be hearings on the Federal Reserve Transparency Act before the August recess.

Before the government hands over even more power to an entity that has refused to account for the trillions of dollars that have gone to bail out the financial system, the public deserves to know that the Fed will in fact be "accountable and clear."

Jane Hamsher blogs at firedoglake