Sen. Chris Dodd (D-Conn.) will cosponsor Sen. Bernie Sanders' (I-Vt.) amendment to audit the Fed, he said on the Senate floor Thursday afternoon, though with modifications, the details of which are crucial to the weight of the audit.
Sanders had been negotiating a compromise with the Federal Reserve to come to an agreement on how broadly the audit powers would extend, Sen. Bob Corker (R-Tenn.) told reporters.
Corker said he had spoken with Sanders and that the Fed wants to "make sure that the audit is not looking at the open market policy, where you're not looking at how interest rates are set." The White House expressed similar concerns earlier Thursday.
Sanders (I-Vt.) has insisted repeatedly that his amendment makes no attempt to audit monetary policy, but rather is focused on the trillions in lending the Fed has done in the dark.
The goal of the negotiations, said Corker, was to make sure "what you're looking at is the financial transactions.... It's my understanding he's working very closely with the Fed to try to get that part right."
Spokespersons for Sanders and the Fed declined to comment.
Shortly after Corker spoke, Dodd, who had been opposing the amendment, took to the Senate floor.
"He's absolutely correct on the transparency issues," Dodd said, adding that he wanted the audit "done in a way so there is no concern about the independence of the Fed being compromised in any way. He has guaranteed with his language here that that is no longer an issue whatsoever. And I want to thank him for that. It's a great amendment."
Sanders, on the Senate floor, hinted at the agreement. "Would allow the GAO to conduct a top-to-bottom audit of all of the Federal Reserve's emergency lending activities since December 1, 2007. In addition, the modifications require the Fed to put on its Web site all of the recipients of over $2 trillion in emergency assistance since December 1, 2007," Sanders said.
A copy of the modifications was not immediately available.
UPDATE: The modified amendment would allow a broad audit and would require a historic amount of disclosure from the Fed. In some respects, it goes further than the House version backed by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), in that it requires disclosure of the names of all institutions, foreign and domestic, on the receiving end of Fed money.
"Notwithstanding any other provision of law, the Board of Governors shall publish on its website, not later than December 1, 2010, with respect to all loans and other financial assistance it has provided during the period beginning on December 1, 2007 and ending on the date of enactment of this Act under the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Term Asset-Backed Securities Loan Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility, the Term Securities Lending Facility, the Term Auction Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the agency Mortgage-Backed Securities program, foreign currency liquidity swap lines, and any other program created as a result of the third undesignated paragraph of section 13 of the Federal Reserve Act."
The amendment is here. If you spot holes, write me at email@example.com.
UPDATE II: Sen. Kirsten Gillibrand (D-N.Y.) will back Sanders amendment, her spokesman says. The White House is also behind the deal.