And it’s pretty clear that Bernie Sanders gave too much up, because the vote was unanimous.

If he could not get even 10 Republicans, and 3 Corporate-Democrats, to vote against it, it is clearly too lenient.

I’d like to see it fixed in conference committee, but I doubt it, since Barack Obama and His Evil Minions^™ will be doing a full court press against that.

Dean Baker, co-director of the CRPR, looks at the deal that Bernie Sanders cut with Chris Dodd, and declares it a victory for the little guy and a big step to making the Federal Reserve accountable, though he does also note the downside of the compromises:

Sanders did make some compromises. The audit has an arbitrary cutoff date of December 2007. The special facilities date from the summer of 2007. It also only has the audit as a one-off proposition, rather than establishing GAO audits of Fed operations as an ongoing principle. The compromise also explicitly exempts open market operations – the Fed’s daily buying and selling of short-term assets to control interest rates – from GAO scrutiny.

These concessions are unfortunate, the Fed is a creation of Congress and for that reason it should be subject to the same investigative procedures as any other federal agency, but they certainly are secondary compared with getting a full accounting of the money lent out through the special facilities. It is also important to note that in one very important way the Sanders compromise goes beyond the original Paul-Grayson language. Under the compromise, the information about the lending facilities will be made fully public where everyone can scrutinize it. The original bill would just have this information made available to the relevant congressional committees. They would then have to make a further decision about what information, if any, would be made public.

My guess is that the December, 2007 cutoff date is not “arbitrary”, and that even as we speak, the Fed is frantically backdating transactions to November 2007, but if this is a step in the process, then it appears to be a good thing.

Previous post here.

Because Larry Summers is too arrogant to realize that he will never be Chairman of the Federal Reserve, and because Larry Summers has Barack Obama’s ear,^* the White House has all but threatened a veto if the finance reform bill passes with an amendment to audit the Federal Reserve:

Right now Sen. Bernie Sanders (I-VT) is trying to round up 60 or more votes to overcome a likely filibuster and include an “audit the Fed” provision in the Senate’s bill. There are just a few small obstacles: the White House, major financial institutions, and the Fed itself. Their resistance is fierce–but the measure is so popular that killing it will be difficult for them and that, in their eyes, threatens to put a grenade at the center of efforts to to tighten the rules on Wall Street.

The pushback is reminiscent, in a way, of the executive branch’s institutional opposition to oversight of the nation’s intelligence agencies and operations. The Fed has always been shrouded in secrecy, and its leaders (in both the private and public sector) continue to insist on keeping their activities opaque, in order, they say, to protect complicated monetary policy from the political process.

……

It’s likely, in fact, that the Obama administration will be under intense pressure to veto the entire financial reform bill if “audit the fed” survives.

This is nuts. I know that Ben Bernanke will be upset, but to the degree that any voter cares about this, they support this idea, and the audit specifically exempts the inflation fighting functions of the Fed, where independence really matters.

It’s pretty clear that the Fed bent (and likely broke) its own rules, and possibly the law, and we need to know how they handled this, and how they screwed this up in the first place, before we make any decisions on what authority they might hold.

^*And Timothy “Eddie Haskell” Geithner’s testicles.