Eighty percent (80%) of Americans now agree with Congress that auditing the Federal Reserve Board is a good idea, according to a new Rasmussen Reports national telephone survey.

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Asked whether he supports the House-passed measure to open the Fed to an audit, which was cosponsored by Reps. Alan Grayson (D-Fla.) and Ron Paul (R-Texas), a senior Treasury official said he is intensely opposed to it.

The official said the measure would undermine the independence of monetary policy and could restrict the ability of the Fed to act in times of crisis. He said that the GAO already has audit authority and that the chairman routinely testifies before Congress.

Congressman Alan Grayson, a cosponsor of HR 1207, responds to the criticism that a thorough audit would undermine the Federal Reserve’s independence:

The idea that the Fed’s mission would be undermined by an audit, said Grayson, “is a scarecrow erected by people who want to cover up the actions of the Fed for their own purposes, including those who actually have worked at part of the Fed, to prevent accountability at any cost.”

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The Fed will support legislation to let government auditors probe six temporary programs created to combat the financial crisis such as the Primary Dealer Credit Facility, Bernanke said yesterday in House testimony. While he would support the delayed release of names of firms getting aid from those programs, he said banks borrowing through the longstanding discount window must be allowed to remain anonymous.

Bernanke’s move toward greater openness may not dissuade lawmakers who want the Fed to disclose more information about the Fed’s lending and policy decisions. Lawmakers are responding to public anger over the Fed’s role in the $182.3 billion bailout of American International Group Inc.

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Federal Reserve Board Chairman Ben Bernanke on Thursday voiced his opposition to legislation calling for regular audits of the Fed’s monetary policies, but 79% of Americans think auditing the Fed is a good idea.

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Without these provisions, a so-called “audit” of the Fed would be worthless.

The full Financial Services Committee is likely to vote on this bill either later this week or early next.

Congressman Ron Paul will offer an amendment to restore the provisions contained in HR 1207 to audit monetary policy and activity with foreign central banks. Thirteen of the 41 Democrats and all 29 Republicans on the Committee have cosponsored HR 1207, and if they hold the line, we will have the votes to win and restore our audit.

Pressure on the Democrat House Financial Services Committee members is critical! Below is a list of Democrats who have cosponsored. Please call them and urge them to vote “Yes” on the Paul Amendment. Click on their names to get their web contact information.

1. Rep. John Adler, NJ (202) 225-4765

2. Rep. Travis Childers, MS (202) 225-4306

3. Rep. Steve Driehaus, OH (202) 225-2216

4. Rep. Alan Grayson, FL (202) 225-2176

5. Rep. Rubén Hinojosa, TX (202) 225-2531

6. Rep. Suzanne Kosmas, FL Toll Free: 1-877-956-7627

7. Rep. Dan Maffei, NY (202) 225-3701

8. Rep. Brad Miller, NC (202) 225-3032

9. Rep. Walt Minnick, ID (202) 225-6611

10. Rep. Ed Perlmutter, CO (202)-225-2645

11. Rep. David Scott, GA (202) 225-2939

12. Rep. Brad Sherman, CA (202) 225-5911

13. Rep. Jackie Speier, CA (202) 225-3531

When contacting these members, remember that up to this point, these members have been allies on this issue. A civil yet firm tone should be kept during these calls. They should be thanked for their cosponsorship, told that Mel Watt’s changes to the bill are unacceptable, and urged to hold the line and honor their promise to support transparency at the Fed by voting “Yes” for the Paul amendment.

It is also important that we contact Financial Services Chairman Barney Frank and House Speaker Nancy Pelosi and urge them to schedule a standalone, up or down vote on the real Audit the Fed bill.

Rep. Barney Frank: (202) 225-5931

Speaker Nancy Pelosi: (202) 225-0100

Now is a crucial time for Audit the Fed. If these 13 Democrats hold the line, we can win this battle. But, they must vote “Yes” on the Paul amendment when the full committee votes.

Representative Ron Paul, a Texas Republican who has called for abolishing the Fed, has gained 307 co-sponsors for legislation to require an audit of the central bank, including monetary policy. Bernanke and other Fed officials oppose the bill.

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In short, many on Capitol Hill want to rip the veil of secrecy off the Fed and make its operations more transparent and open to full examination by Congress.

In that context, two unlikely political allies, Republican Congressman Ron Paul, the leading libertarian figure on Capitol Hill, and former presidential candidate, and independent Senator Bernie Sanders of Vermont, who is the only US lawmaker who is proud to describe himself as a socialist, have been promoting ‘audit the Fed’ legislation in Congress.

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Paul’s legislation now has become a rallying point for Republicans and Democrats angry over the bailouts and the Fed’s increased and mysterious role in the economy. More than two-thirds of the members of the House of Representatives have signed on as co-sponsors of Paul’s “audit the Fed” bill.

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I am speaking this morning in support of HR 1207, the Federal Reserve Transparency Act. As the Committee knows, this bill would require a full audit of the Federal Reserve by the Government Accountability Office (GAO).

On November 10, 2008, Bloomberg News ran the following headline: “Fed Defies Transparency Aim in Refusal to Disclose.” The story pointed out that the Fed was refusing to identify the recipients of trillions of dollars in emergency loans or the dubious assets the central bank was accepting as collateral. When the initial $700 billion congressional bailout was being debated last September, Fed chairman Ben Bernanke and then-Secretary of the Treasury Hank Paulson couldn’t emphasize their commitment to transparency strongly enough. But “two months later, as the Fed [lent] far more than that in separate rescue programs that didn’t require approval by Congress, Americans [had] no idea where their money [was] going or what securities the banks [were] pledging in return.”

Matthew Winkler, editor-in-chief of Bloomberg News, put it simply: “Taxpayers — involuntary investors in this case — have a right to know who received loans, in what amounts, for which collateral, and why specific loans were made.”

This has been portrayed as a trivial matter being pursued by some cynical and uppity Americans who don’t know their place. But there is no good reason for Americans not to know the recipients of the Fed’s emergency lending facilities. There is no good reason for them to be kept in the dark about the Fed’s arrangements with foreign central banks. These things affect the quality of the money that our system obliges the American public to accept.

The Fed’s arguments against the bill are unlikely to persuade, and will undoubtedly strike the average American as little more than special pleading. Perhaps the most frequent of the claims is that a genuine audit would jeopardize the alleged independence of the Fed. Congress could come to influence or even dictate monetary policy.

This is a red herring. The bill is not designed to empower politicians to increase the money supply, choose interest-rate targets, or adopt any of the rest of the Fed’s central planning apparatus, all of which is better left to the free market than to the Fed or Congress. It seeks nothing more than to open the Fed’s books to public scrutiny. Congress has a moral and legal obligation to oversee institutions it brings into existence. The convoluted scenarios by which merely opening the books will lead to an inflationary catastrophe at the hands of Congress are difficult to take seriously.

At the same time, as we hear this objection repeated time and again, we might wonder just how independent the Fed really is, what with its chairman up for reappointment by the president every four years. Have these critics never heard of the political business cycle? Fed chairmen have been known to ingratiate themselves into the president’s favor close to election time by means of loose monetary policy and the false (and temporary) prosperity it brings about. Let us not insult Americans’ intelligence by pretending this phenomenon does not exist.

Moreover, try to imagine a Fed chairman doggedly seeking to maintain the value of the dollar even if it meant refusing to monetize a massive deficit to fight a war or “stimulate” a depressed economy. It is not possible.

If there is any truth to the idea of Fed independence, it lay in precisely this: the Fed may reward favored friends and constituencies with trillions of dollars in various kinds of assistance, while keeping the public completely in the dark. If that is the independence we’re talking about, no self-respecting American would hesitate for a moment to challenge it.

A related argument warns that the legislation threatens to politicize lender-of-last-resort decisions. Again, this is untrue. But even if it were true, how would that represent a departure from current practice? I hope we are not asking Americans to believe that the decisions to bail out various financial institutions over the past two years, and in particular to allow them to become depository institutions overnight that they might qualify for assistance, were made on the basis of a pure devotion to the common good and were not political at all. Most Americans, not unreasonably, seem convinced of another thesis: that Goldman Sachs, for instance, might be just a little bit more politically well connected than the rest of us.

Opponents of HR 1207 have sometimes tried to claim that the Fed is already adequately audited. If this were true, why is the Fed in panic mode over this bill? It is the broad areas these audits exclude that the American public is increasingly interested in investigating, and these are the gaps that HR 1207 seeks to fill.

The conventional wisdom seems to be that the monetary system we have now is sound and beyond reproach, and certainly better than any system that preceded it. My purpose today is not to render judgment upon such views, however deeply misguided I happen to consider them, and however inaccurate their implicit view of nineteenth-century financial panics. My point is simply this: if our monetary system were really as strong, robust, and beyond criticism as its cheerleaders claim, why does it need to rely so heavily on public ignorance? How can it be a sound banking system that depends on keeping the public in the dark about the condition of its financial institutions?

Let me also make clear that supporters of this legislation are strongly opposed to a watered-down version of the bill — which, incidentally, would only increase public suspicion that someone is hiding something.

If the Federal Reserve Transparency Act passes and the audit takes place, the American people will have achieved a great victory. If the legislation fails, more and more Americans will begin to wonder what the Fed could be so anxious to keep hidden, and the pressure for transparency will simply intensify. A recent poll finds 75 percent of Americans already in favor of auditing the Fed. The writing is on the wall.

The Federal Reserve may as well get used to the idea that the audit is coming. That would be a far more sensible approach than the counterproductive and condescending one it has adopted thus far, in which the peons who populate the country are urged to quit pestering their betters with all these impertinent questions. The Fed should take to heart the words of consolation the American people are given whenever a new government surveillance program is uncovered: if you’re not doing anything wrong, you have nothing to worry about.

The superstitious reverence that Americans have been taught to have for the Federal Reserve is unworthy of the dignity of a free people. The Fed enjoys a government-granted monopoly on the creation of legal-tender money. It is not an unreasonable imposition for Americans to demand to know about the activities of such an institution. It is common sense.