Sanders Amendment To Financial Reform Bill Passes Easily

An amendment to increase the transparency through which the Federal Reserve (Fed) operates passed on Tuesday by a vote of 96-0.

The measure, sponsored by Sen. Bernie Sanders (I-Vt.), would require the Government Accountability Office (GAO) to conduct a one-time audit of the powerful central banking agency, going back to December 1, 2007. At a press conference with reporters immediately following the vote, Sanders praised his colleagues for their unanimous support.

"What just transpired is an historic vote for the American people in terms of finally bringing transparency to what is perhaps the most powerful federal agency, and that is the Fed," he said.

A similar amendment that would've required the GAO to conduct a far more wide-ranging audit, and would've made such audits recurring, failed by a vote of 62-37. The measure was the product of Sanders's initial, less watered-down effort to shine more light on the Fed, mirrored after a proposal put forth by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.) that passed the House last year.

After Sanders modified his amendment, Sen. David Vitter (R-La.) re-introduced the original version.

'Terror Gap' Allows Terrorists To Purchase Guns, Explosives

By Benny Martinez
University of New Mexico/Talk Radio News Service

Senator Frank Lautenberg (D-N.J.) told the Senate Homeland Security and Governmental Affairs committee today that there are loopholes in the United States’ current gun laws that allow known and suspected terrorists to legally purchase guns and explosives.

“To put it simply, right now the Federal Government cannot block the sale of explosives or firearms to someone because they are on the terrorist watch list,” Lautenberg said.

According to a statement released by the Government Accountability Office (GAO), since 2004, terrorists attempted to purchase guns and explosives in the United States with a 91 percent success rate. Lautenberg said that these figures are perfect examples of how the “Terror Gap” is being exploited in this country.

The Senator has introduced new legislation that would close this loophole in the U.S. by giving the Attorney General the authority to stop the sale or transfer of guns or explosives to terrorists. In an effort to protect America’s right to bear arms, Lautenberg said that in this new legislation, a gun holder who disagrees with the Attorney General’s finding has the power to challenge the ruling.

“This commonsense legislation is not anti-gun, it’s anti-terrorism,” he sad.

In light of Saturday’s incident where an SUV loaded with flammables and explosive material was abandoned in Times Square, New York City Mayor Michael Bloomberg was invited to the hearing and testified in support of the new legislation.

“At a time when the threat of terrorism is still very real...it is imperative that Congress close this terror gap in our gun laws, and close it quickly,” he said.

Similar legislation is currently being drafted on the House side.

Ron Paul Seeks Fed Oversight, Fed Fights Back

by Julianne LaJeunesse- University of New Mexico

Should the Federal Reserve Committee be regulated by the Government Accountability Office? U.S. Representative Ron Paul (R-Texas) says yes, and Scott G. Alvarez of the Federal Reserve says no.

Paul is the sponsor of H.R. 1207, which calls for audits on the Federal Reserve, a quasi-public entity that in theory can control the nation's money supply, set interest rates, and implement monetary policy.

At a Friday hearing, Paul said the Fed needs GAO oversight because they aren't doing their job correctly.

"The Federal Reserve was designed, and their mandate was to make sure that we have full employment, price stability, and stable interest rates," Paul said. "In my lifetime, interest rates have been 21 percent and less than one percent- so they fail there. They [the Fed] want a stable dollar and stable prices... well, we have continuous inflation."

Paul said it's Congress' responsibility to make sure the Fed does what it was created for and not buy into the idea that the Fed needs more power and more secrecy.

Fed Board of Governors General Counselor Scott G. Alvarez argued before Paul, Chairman Barney Frank (D-Mass.), and other members of the House Financial Services Committee, saying that Fed autonomy is instrumental in safeguarding U.S. interest rates, but also that an independent Fed is a nonpolitical Fed.

Alvarez said from an economic stance, GAO regulation would hinder Fed access to and implementation of some programs.

"If it looks like the Federal Reserve is changing directions because a statement [of] the policy review by another agency is influencing the Federal Reserve's decision... then the integrity of the process will be undermined, confidence that the Federal Reserve will move in the direction that is best for the economy will be undermined, and we won't be able to carry out our job as well," Alvarez said. "And that's what we're concerned about."

Alvarez said the Fed has taken many steps to increase transparency since the 2008 bank bailouts, but when Rep. Emanuel Cleaver II (D- Mo.) asked him about the misinterpretation between Congress and the Treasury Department and the Federal Reserve, as far as Troubled Assets Relief Program allocations, Alvarez said the latter departments decided to use the funds to restore confidence to banking institution, a decision Cleaver said was not immediately apparent when TARP was passed.

GAO Gives Three Options For Cap-And-Trade Legislation

By Mariko Lamb-Talk Radio News Service

In a hearing with the Senate Finance Committee Tuesday, John Stephenson, Director of the Government Accountability Office (GAO) Environmental Protection Issues, Natural Resources and Environmental Team, outlined three options for the distribution of emission allowances for companies under a cap-and-trade program: auctioning revenue allowances, allocating free allowances to covered entities, or a combination of the two.

According to a preliminary report by the GAO, auctioning revenue allowances would enable the government to collect substantial revenues, create incentives for companies to lower emissions before the program starts, and level the playing field for covered entities. However, “auctioning does not by itself offer compensation to covered entities that could feel the greatest economic impact of the program,” Stephenson said.

The second option, allocating free allowances to covered entities, could “help build support for the program and ease the transition," he said, but added that it may also potentially dampen incentives to decrease electricity use by businesses and households.

The third option, a combination of auctioning and free allocation, “may help compensate energy intensive industries,” noted Stephenson. A study by the Congressional Budget Office suggests that a 6% and 21% free allocation of allowances would fully compensate these industries.

According to the American Clean Energy and Security Act, passed by the House in June, 85% of emission allowances would be allocated by the government for free. Chairman of the Senate Finance Committee Max Baucus said, “whatever the approach, we need to devise a system that both meets environmental goals and passes political muster. That won’t be easy. The close vote in the House tells us that.”

“Let’s see if we can figure out how to distribute emission allowances in a way that one might call ‘just.’ Let’s see if we can figure out how to give all Americans what they deserve,” Chairman Baucus said.

The GAO will release a final report to the Senate Finance Committee later this year in preparation for a markup on a climate change bill later this year.

U.S. Agencies Slated To Confront Illegal Arms Trade In Mexico

By Aaron Richardson-Talk Radio News Service

The Government Accountability Office (GAO) recently released a report detailing the need for the U.S. to combat arms trafficking into Mexico.

Jeff Ford, the Director for International Affairs and Trade at the GAO outlined some of the steps the U.S. needs to take in order to find a solution.

“We talk in the report about the need to be able to trace the weapons that are seized by the Mexican government, to find out where they came from and also to get information to help develop cases and investigations of who might be smuggling these guns into Mexico,” said Ford during an interview with the Talk Radio News Service.

Ford stated that he was pleased the issue is finally getting the attention he believes it deserves.

“This strategy, that just came out two weeks ago, is the first one that we’ve seen that has a chapter in it that discusses the arms issue. So the very fact that they are recognizing that this is an important issue, that within its self is an important step forward,” Ford said.