Read more: Local, State, Politics, Jim Demint, Ben Bernanke, Federal Reserve, Ron Paul
U.S. Senator Jim DeMint (R-S.C.)
COLUMBIA. – South Carolina junior Senator Jim DeMint announced Thursday he will oppose the nomination of Ben Bernanke to serve a second term as chairman of the Federal Reserve.
DeMint said he would also block consideration of the nomination on the Senate floor until lawmakers vote on their version of a House bill introduced by Texas Congressman Ron Paul that would require an audit of the Federal Reserve. The House bill has more than 300 co-sponsors.
The Senate version of the legislation sponsored by Vermont Senator Bernie Sanders has more than 30 co-sponsors and would allow the Government Accountability Office to inspect the Fed's books.
"Under Mr. Bernanke's leadership, the Fed has lent several trillion dollars to failing financial institutions that should have been held accountable by market forces," said DeMint. "The total amount of these bailouts exceeds the entire annual budget of the United States. Yet the public has not been given adequate information about these bailouts."
Critics of the proposal have argued the Fed needs to operate in secrecy to ensure the stability of financial markets as well as the economy in general.
“To be very, very clear, I in no way object to -- in fact I welcome -- transparency about the Fed’s activities and the Fed’s financial position, both to the public and to the Congress,” Bernanke said at a Congressional hearing Thursday. “I am, however, concerned with the auditing of monetary policy.”
Bernanke said the Fed has already become more transparent under his leadership to include weekly updates about its balance sheet and a more detailed explanation of data in its monthly reports.
Bernanke said subjecting the Fed to an audit would damage the body's ability to make independent decisions and would subject the Fed to political pressure.
“My fear is that if we take what could be an unpopular step Congress will order an audit, which would be a way of applying pressure, or perceived as a way of applying pressure, to our policy decisions,” said Bernanke.
(The Associated Press contributed to this report.)
