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U.S. Rep. Mel Watt has denied gutting legislation to audit the Federal Reserve, as the bill's sponsor, Texas Republican Ron Paul, charged.
The proposal, which has 308 co-sponsors, would allow audits of the Fed's monetary policy deliberations. Fed officials oppose the bill.
The Fed has drawn scrutiny from Congress and the public after it bailed out financial institutions and doubled its balance sheet to $2.16trillion in the last 14 months to stem the deepest recession since the 1930s and unlock frozen credit markets.
"We don't want to have politicians second-guessing the Fed on monetary policy," said Watt, a Democrat from Charlotte. He wouldn't say what specific changes he made in the legislation. "When Ron Paul says I gutted the bill, he's exaggerating. I support auditing a number of transactions."
Paul, the senior Republican on Watt's domestic monetary policy and technology subcommittee, said Friday that Watt had "gutted" the so-called Audit the Fed proposal last week, "making it worse."
Watt said he favors audits of Fed transactions under a section of the Federal Reserve Act that allows the Fed to be lender of last resort to banks under emergency conditions.
Watt, whose district includes the headquarters of the Charlotte-based Bank of America, said he's "regularly on the side of issues that banks aren't happy with."
The bill will be part of a broader financial regulatory reform package that will likely be considered by Congress before the end of the year, Watt said.
