Brown-Kaufman and the Sanders Amendment to Audit the Federal Reserve Bank

[Gates9]

I don't understand why congress would vote against either of these bills.
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-The Brown-Kaufmann Amendment

-------The Democrats split 30 for, and 27 against. That's a little less than HALF of the Dems voting it down!

***This bill was created to address "Too Big To Fail", by limiting the size of banks to something like 3% of GDP (right now 6 banks hold over 60% of GDP- Per Bernie Sanders), amongst other things.

"Sens. Sherrod Brown (D-OH) (pictured) and Ted Kaufman (D-DE) introduced a bill, The Safe Banking Act of 2010, which would mandate hard leverage and size caps on financial institutions and force the breakup of many of the largest mega-banks. The bill would place a cap on any financial institution, limiting their total assets to 3% of GDP (that would lower to 2% for banks, as opposed to 3% for non-bank institutions). Currently, the 6 largest banks have holdings that equal 63% of GDP. The Safe Banking Act would also impose a 10% cap on any bank holding company’s share of insured deposits. Bank holding companies and “selected nonbank financial institutions” would have a leverage limit of 6%, meaning that they would not be able to lend out more than around sixteen dollars for every dollar of capital in house.”

-April 22, 2010-Senators Introduce 'Too Big To Fail' Amendment
Brown, Kaufman Introduce The Safe Banking Act Of 2010
by David Dayen - Firedoglake.com

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-Sanders Amendment to Audit the FED- Now this passed, but not the way it should have. The original amendment proposed a full-scale audit of all the FEDs transactions, activities, and transcripts from like the past thirty or forty years. In a back-room deal, it was reduced to a nearly useless inquiry;

"The House version of reform contains an amendment (.pdf) to audit the Fed sponsored by Rep. Ron Paul (R-TX). Indeed, in Sanders' original version (.pdf), he virtually copied Paul's amendment word-for-word, and added a section about better publicizing the details of Fed activity. Initially, both would have allowed periodic audits of all of the Fed's policy actions. They each would have also permitted the Government Accountability Office to determine what scopes the audits would encompass.

No more. In order to appeal to a broader audience, the revised Senate amendment (.pdf) has been watered down significantly. Now, the action would be reduced to a one-time audit, specifically targeted at the Fed's new programs created during the financial crisis. It also specifies the scope of work that the GAO should consider.

Paul is not amused. He released a statement yesterday condemning the changes. In it he says:

The Sanders Amendment now contains softer compromise language that exempts monetary policy decisions, discount window operations, and agreements with foreign central banks from Government Accounting Office ("GAO") audit.

Anyone who hoped for greater ongoing transparency to the Fed's activities will be very disappointed with the new Sanders version. "

-Daniel Indiviglio, Theatlantic.com, May 7 2010

***You know, Ron Paul and Bernie Sanders getting together on an audit of the FED is eyebrow raising enough, but when SANDERS comes back with compromise language, I get really concerned about where this is all going. This bill passed 96-0.

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THE WHITE HOUSE OPPOSED BOTH OF THESE PIECES OF LEGISLATION

My question is this; aside from The Audit of the FED revealing very ugly info on it's activities, and spooking the market thusly, what is the logical argument against these bills? I'm looking for an economics related answer, not; "because congress is owned by the banksters". I've already assumed as much.

[Demeter]

1. There Is No Economic Reason for Willful Blindness and Public Opacity

That's my answer, and I'm sticking to it.