Staunch Tea Partiers, Republicans and Democrats came together to approve the bill by a vote of 327-98, boosting the profile of Paul, a perennial presidential candidate with largely libertarian views, the Los Angeles Times reported.
The bill would remove existing barriers to audits of the Fed, opening the books on transactions with foreign central banks and open-market operations and requiring a report from the comptroller general, the newspaper said.
However, the lopsided vote, brought on by lawmakers' concerns that Wall Street isn't feeling the effects of the recent recession as much as the average taxpayer, doesn't mean the Senate will take up action any time soon, the Times said.
"Congressional review of the Fed's monetary policy decisions would be a 'nightmarish scenario,' especially judging by the track record of this Congress when it comes to governing effectively," said House Whip Steny Hoyer, D-Md. "This bill increases the likelihood that the Fed will make decisions based on political rather than economic considerations, and that is not a recipe for sound monetary policy."
Eighty-nine Democrats voted for the bill despite warnings from party leaders including Rep. Barney Frank, ranking member on the Financial Services Committee, who said the measure would destabilize the economy.
Paul for decades has blamed inflation on the Fed's ability to control the country's money supply.
"I don't know how anybody could be against transparency and they want secrecy, especially when that secrecy is to protect individuals who deal in trillions of dollars -- and these trillions of dollars bail out all the wealthy, rich people, the banks and the big corporations," Paul said Tuesday.
"To say that we should have secrecy and say that it's political to have transparency? Well it's very political when you have a Federal Reserve that can bail out one company and not another company. That's pretty political."