When the Federal Reserve engineered JPMorgan's takeover of failing investment bank Bear Stearns, the Fed guaranteed some $30 billion in Bear Stearn's assets. This has prompted an investigation into the deal by the Senate Finance Committee. Sen. Max Baucus (D-MT) explains why Congress should get involved: Americans are being asked to back a brand-new kind of transaction, to the tune of tens of billions of dollars. With jurisdiction over federal debt, it's the Finance Committee's responsibility to pin down just how the government decided to front $30 billion in taxpayer dollars for the Bear Stearns deal, and to monitor the changing terms of the sale. The Federal Reserve is an independent central bank that does not need approval from Congress or the president to execute its policies. And while it is subject to Congressional oversight, its does not require federal appropriations to maintain its operations, because, in its role as a bank, it actually turns a profit. If the bank is self-financing, then, how has its role in the Bear Stearns deal put taxpayer dollars at risk? 2007 Federal Reserve Budget Report: The major source of Federal Reserve Bank income is earnings from the portfolio of U.S. government securities in the System Open Market Account, estimated at $36.5 billion in 2006. Earnings in excess of expenses, dividends, and surplus are transferred to the U.S. Treasury—in 2006 an estimated $28.5 billion. (These earnings are treated as receipts in the U.S. budget accounting system and as anticipated earnings projected by the Office of Management and Budget in the U.S. budget.) In 2007, the Fed gave the Treasury over $32 billion. Essentially, the federal government required $32 billion less tax revenues (or borrowing) that year to operate. So, if the Bear Stearns assets turn out to be worthless, the Fed will give the Treasury $30 billion less than it otherwise would have, requiring the federal government to finance $30 billion more of its annual budget through borrowing - borrowing with interest that taxpayers will eventually have pay off.