Senate Panel Votes to Boost Funding for Financial Regulators
A U.S. Senate panel approved a bill that would increase funding for financial-industry regulators as Democrats counter Republican efforts to reduce spending for agencies implementing the Dodd-Frank Act.
The Securities and Exchange Commission would get an additional $222 million for fiscal 2012 and the Commodity Futures Trading Commission another $37.7 million under a $21.7 billion draft spending bill approved today by a Senate appropriations subcommittee in a voice vote.
“My top priority is to make sure these two watchdog agencies have the resources they need to maintain the integrity of the markets in America,” Senator Richard Durbin, the Illinois Democrat who leads the Financial Services and General Government subcommittee, said before the vote. “These agencies occupy pivotal positions because of the Dodd-Frank bill, and the volume of work they face is growing geometrically.”
The SEC and CFTC, which are responsible for writing most of the new rules required by the financial-regulation overhaul enacted last year, have been caught in a tug-of-war between Republicans pushing to cut federal spending and Democrats aiming to give regulators funding to complete work on the rules. The increases in the Senate bill would represent a 19 percent boost, to $1.4 billion, for the SEC and an 18 percent rise, to $240 million, for the CFTC.
The House of Representatives in June passed a spending bill that would cut the CFTC’s budget by 15 percent, or $30 million from its current spending level, and is waiting to act on a committee-approved bill that denied President Barack Obama’s request to increase the SEC’s funding.
Senator Jerry Moran of Kansas, the top Republican on the panel, said he had concerns with the CFTC funding levels in the bill and would consider amendments to make changes during full committee consideration.
“The CFTC has failed to prioritize its rulemaking process,” Moran said today. “I believe this bill is an opportunity for us to get the CFTC to change their methodology in regard to those rules.”
Moran also questioned the funding structure for the Consumer Financial Protection Bureau, which was created in Dodd- Frank. The senator, who has introduced a bill that would change how the bureau is funded and how its leader are chosen, said the spending bill could be “a vehicle” for those changes.
Under the law, the CFPB is to be funded from a percentage of the Federal Reserve’s budget, as much as $500 million a year, with the bureau’s director deciding how much is needed. The House Republican spending bill calls for the agency to be funded by congressional appropriations starting Oct. 1, 2012.
Even with the increases, Durbin said, the Senate bill fails to meet the needs of the SEC and CFTC as lawmakers look to reduce deficit spending in the federal budget.
“We’ve had to make some hard decisions in this bill a number of which I don’t like one darn bit,” Durbin said. “We can’t give them the resources they need because of the budget cutbacks.”
The Senate bill, which would provide $4.3 billion less than Obama had sought, also includes $11.6 billion for the Internal Revenue Service.
The IRS received $12.1 billion this year and requested $13.3 billion for fiscal 2012 as it seeks to bolster tax enforcement and implement parts of the health-care law passed in 2010.
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