Senator Judd Gregg, R-N.H., released a statement Friday in which he called an amendment by Representative Ron Paul, R-Texas, to institute new Congressional oversight powers of the Federal Reserve "political pandering."
Thursday night, the House Financial Services Committee added a provision to a financial system reform bill that could potentially give Congress the right to order the Government Accountability Office to audit all of the Federal Reserve's activities.
The provision, which was proposed by Paul, would give the GAO the right to audit the Fed's monetary policy decisions. The GAO has had the right to audit other operations by the central bank, but the Fed's monetary policy has been independent from GAO reviews.
Though the amendment allows Congress to audit all of the Fed's activities, it makes clear that it is not to be misconstrued as an attempt to allow Congress or the GAO to dictate monetary policy.
"Yesterday's passage of the Paul Amendment by the House Financial Services Committee is a dangerous move by this Congress to pander to the populist anger currently directed against our central bank, the Federal Reserve," Gregg said in his statement Friday.
He added, "The Fed's very public role in combating the financial crisis has heightened interest in and criticism of this vital institution. But, make no mistake; this move to bring the Fed's conduct of monetary policy under the control of Congress is a grave threat to our economy."
Gregg argued, "We simply must not allow political interests in Congress to compromise the Fed's historic independence and reduce its broad ability to manage monetary policy for the best interests of our nation."
He said the Fed's "important mission" as the "lender of last resort" would be "seriously undermined" by Paul's amendment.
"The Fed's more public role may present an easy target today, but maintaining its independence will help our economy stay on the path to recovery and, ultimately, sustainable economic growth," Gregg concluded.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.