Former presidential candidate and notorious gadfly of the Republican party, Rep. Ron Paul (R., Texas), has called for abolishing the Federal Reserve for more than two decades with little success. That is, until the Democrats took over.
It was Paul's moment of glory Thursday when the House Financial Services Committee approved his amendment to impose significant new audits on the Fed.
While committee chairman Barney Frank (D., Mass.) opposed Paul's proposal, it didn't stop him from crowing about its advancement.
"I do want to take credit as the chairman of the committee for being the first one in 26 years who gave the gentleman from Texas the chance to operate this legislation," Frank said during a lengthy committee debate on a financial overhaul measure to mitigate systemic risk.
Frank didn't mince words in pointing out just how estranged Paul has been from his GOP colleagues. In 2003, Frank noted, Paul was in line to chair a domestic monetary-policy subcommittee that "promptly disappeared...for the sole reason of denying the gentleman from Texas the chairmanship."
Two years later, Republican leaders "dragooned" another lawmaker on leave from the panel to come back and assume another subcommittee chairmanship, Frank said.
This was done, "once again to preempt Dr. Paul, who said to me quite presciently at that time, 'I guess I'll have to wait for you to be chairman to get anywhere on this.' Well, I am the chairman and he's getting somewhere," Frank said.
Rep. Spencer Bachus of Alabama, the committee's ranking Republican, pointed out that Paul now has a leadership spot in the panel.
Paul is the ranking Republican of the subcommittee on domestic monetary policy, Frank acknowledged, a slot he was given "when there was no alternative."
Frank opposes Paul's proposal to open the Fed to auditing of its decisions about interest rates and lending to individual banks, saying the provision could be seen as "weakening the independence of monetary policy."
Former Fed chairmen Alan Greenspan and Paul Volcker also have expressed opposition to Paul's proposal, saying protection of the Fed's internal deliberations is "indispensable" to the central bank's conduct of monetary policy.
But Paul has garnered considerable support, with more than 300 House members signing on to a separate Fed auditing bill that he sponsors.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com
-0-