HR-24-115
Placed on the Union Calendar, Calendar No. 228.
Sponsored by Thomas Massie (R-KY)
What it does
This bill would require the Government Accountability Office (GAO) to complete a full audit of the Federal Reserve Board and all Federal Reserve banks within 12 months of enactment. It would also explicitly permit the GAO to audit areas previously off-limits, including international financial transactions, monetary policy decisions, Federal Open Market Committee (FOMC) transactions, and internal communications among Federal Reserve officers and employees about any of these matters.
Who benefits
Members of Congress who seek greater oversight of the Federal Reserve would gain a formal tool to review its operations. Economists, journalists, researchers, and the general public would gain access to information about monetary policy decisions that currently occur without public disclosure. Taxpayers broadly would gain visibility into how a powerful public institution manages trillions of dollars in assets and transactions. Financial market participants who argue that Fed opacity creates uncertainty could benefit from greater predictability.
Who is hurt
The Federal Reserve as an institution would face reduced operational independence, as its internal deliberations and monetary policy decisions would become subject to external audit. Financial markets could be negatively affected if the prospect of audits causes the Fed to alter its decision-making process or if sensitive deliberations are disclosed in ways that move markets. Foreign central banks and governments that engage in confidential financial transactions with the Fed could reduce cooperation if they fear disclosure. Some economists argue that reduced Fed independence could lead to less effective inflation control, which would affect all consumers.
Supporters argue
Supporters argue that the Federal Reserve is a uniquely powerful public institution that controls the money supply, sets interest rates, and manages trillions of dollars in assets — yet operates with far less transparency than virtually any other federal agency. They contend that existing law already exempts the Fed's most consequential decisions — monetary policy and FOMC transactions — from GAO review, creating a blind spot in congressional oversight. Supporters maintain that a GAO audit would not direct Fed policy but simply shine light on how decisions are made, allowing Congress and the public to hold the institution accountable. They point out that the GAO audits nearly every other federal agency and that no institution funded by or operating under federal authority should be exempt from basic oversight. They argue that transparency strengthens, rather than weakens, institutional credibility over time.
Opponents argue
Opponents argue that subjecting the Federal Reserve's monetary policy deliberations to GAO audit would fundamentally compromise the central bank's ability to make decisions based on economic data rather than political pressure. They contend that the credibility of monetary policy — particularly inflation control — depends on markets believing the Fed will act independently of short-term political considerations, and that the threat of congressional audit could cause Fed officials to self-censor or shift policy to avoid scrutiny. Opponents note that the Fed already undergoes financial audits and publishes meeting minutes, transcripts, and detailed reports, making additional audits redundant. They also warn that disclosing confidential communications with foreign central banks could damage international financial cooperation and destabilize currency markets. Many economists and former Fed chairs have argued that central bank independence is a cornerstone of a stable economy.
Constitutional context
The Federal Reserve operates under Congress's Article I authority over currency and commerce. The Commerce Clause and Necessary and Proper Clause provide the constitutional basis for Congress to create and oversee the Fed. The bill raises questions about the separation of powers: while Congress has broad authority to structure and oversee agencies it creates, the degree to which it can direct or surveil an independent agency's internal deliberations touches on executive branch autonomy. Post-Loper Bright (2024), courts independently review agency statutory interpretations, which could affect how any Fed rules or actions disclosed by an audit are subsequently challenged. West Virginia v. EPA (2022) reinforced that major policy decisions require clear congressional authorization — a principle that cuts both ways here, as it could support Congress's authority to mandate this audit or limit the Fed's ability to resist it.
Checks and balances
This bill would shift oversight authority toward the Legislative Branch. The GAO is an arm of Congress, so expanding its audit authority over the Federal Reserve would give Congress direct visibility into an institution that currently operates with significant independence from both Congress and the Executive Branch. The Federal Reserve Board, an independent agency, would experience a reduction in its operational autonomy. The Executive Branch is not directly affected, though greater congressional oversight of the Fed could indirectly constrain the President's ability to use Fed policy as an informal economic tool.
Historical precedent
The Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) included a one-time GAO audit of the Federal Reserve's emergency lending programs during the 2008 financial crisis. Earlier versions of "Audit the Fed" legislation were introduced in multiple Congresses (e.g., 112th, 113th, 114th) but did not become law. The original Federal Reserve Act of 1913 established the Fed's structure, and the Federal Banking Agency Audit Act of 1978 set the current boundaries of GAO audit authority over the Fed.