What a surprise. There is an attempt to gut the audit the Fed bill:

Rep. Mel Watt, a Democrat from North Carolina, has introduced an amendment intended as an alternative to the measure to audit the Federal Reserve introduced by Reps. Ron Paul (R-Texas) and Alan Grayson's (D-Fla.) . But instead of increasing transparency, as the amendment claims to do, Watt's measure would instead make the institution more opaque.

Right now the House Financial Services Committee is marking up the Financial Stability Improvement Act of 2009.

A bill introduced by Ron Paul H.R. 1207 is now being rewritten as an amendment by Paul and Grayson and will hopefully be added to this large Financial reform bill.

In other words, the Watt amendment attempts to subvert any attempts to audit the Federal Reserve by blocking the Paul/Grayson amendment and is presented as a "substitute" amendment.

The devil, as always, is in the details. While Watt's amendment talks a big game about opening up the Fed to a complete audit, all of the new powers granted must be carried out "each case in accordance with subsections (b) and (e)."

Those subsections of the current law delineate the many restrictions that an auditor confronts when seeking to audit the Fed. Watt's measure not only leaves those in place but requires all audits to abide by them.

And in addition to the current restrictions in place, it creates new ones. An auditor could not look at loans or liquidity arrangements the Fed enters into, the terms of those arrangements, or the effect of those loans and other liquidity deals on "reserves, the balance sheet or financial condition of a Federal reserve bank or the Federal Reserve System."

It's unusual to get a heads up before a bill is gutted, it's usually after the fact, so if one of your representatives is on the House Financial Services Committee, now might be a good time to call.

Naked Capitalism has additional commentary with phone numbers of House Committee members.