Battles over regulatory change in Washington heated up Thursday as a House panel approved audits of the U.S. Federal Reserve.
The House Financial Services Committee chose a bill sponsored by Rep. Ron Paul, R-Texas, who has long sought federal oversight of the central bank and who published a book this year called "End the Fed."
As a measure of the Fed's inability to keep friends this year, The New York Times pointed out Paul has introduced the same or similar bills every year since the early 1980s. It never caught fire, until now.
This year, committee members dismissed a compromise effort and voted to approve Paul's bill.
The bill would require the Government Accountability Office to audit the Fed. The auditing power would include emergency policy decisions and routine items, like interest rate decisions.
Fed officials argue the bill would impede the independence necessary to set monetary policy.
If the bill makes it into law, in theory, if the Fed raised interest rates and business grumbled, Congress would have the power to slap an audit on the Fed.
"This is a political warning shot. It says that Congress has a mechanism to opine about monetary policy. The fear is that every time there's a threat of higher interest rates, someone in Congress will ask for a study of the costs of higher interest rates," Vincent Reinhart, a former Fed official told the Times.
Frustration also visited the Joint Economic Committee meeting Thursday, where another Texan, Rep. Kevin Brady, a Republican, told U.S. Treasury Secretary Timothy Geithner he should resign.
Separately, a Democrat, Rep. Peter DeFazio of Oregon also called for Geithner to step down and criticized White House economic adviser Larry Summers.
"They want to keep the TARP money either to continue to bail out Wall Street if there are future problems, or maybe … to pay down the deficit. That's absurd," DeFazio said, referring to the $700 billion Troubled Asset Relieve Program, which can be kept open for another year at Geithner's request.
Geithner, at the Joint Economic Committee meeting, said it was time to "put the TARP program out of its misery," although sources told The Washington Post the Obama administration was leaning in the direction of keeping TARP around as part of the financial options during a nascent recovery.
The Commerce Department said Wednesday housing starts in October fell 10.6 percent to a seasonally adjusted annual rate of 529,000 homes, the lowest figure in six months.
On Thursday, the Mortgage Bankers Association released more pessimistic housing data, saying one out of 10 U.S. homeowners were a payment or more behind on their mortgages -- a total of 5 million households. About one in seven homeowners were either delinquent -- at least one payment behind -- or in foreclosure, the MBA said.
In market movement Friday, the Nikkei 225 in Japan slid 0.54 percent, while the Shanghai Composite index in China lost 0.37 percent. The Hang Seng index in Hong Kong dropped 0.83 percent, while the Sensex in India added 1.41 percent.
In Australia, the S&P/ASX 200 shed 1.34 percent.
In midday trading in Europe, the FTSE 100 in Britain fell 0.44 percent, while the DAX 30 in Germany lost 0.78 percent. The CAC 40 in France shed 0.89 percent, while the pan-European DJ Stoxx 50 lost 0.96 percent.
