The U.S. Commodity Futures Trading Commission, the regulator that’s writing new rules for the derivatives market, faces a 15 percent budget cut under a spending bill circulated by House Republicans.
The CFTC’s budget would fall to $172 million from $202 million under the plan to be considered tomorrow by the agriculture subcommittee of the House Appropriations Committee. It “provides the necessary resources” for the CFTC to fulfill its duties, Representative Jack Kingston, a Georgia Republican and subcommittee chairman, said in a statement. President Barack Obama had requested $308 million in his 2012 budget proposal.
The CFTC and U.S. Securities and Exchange Commission are writing regulations, mandated by the Dodd-Frank Act, for the $601 trillion swaps market after largely unregulated transactions helped fuel the 2008 credit crisis. The CFTC aims to complete its rulemaking by year-end.
The Republican budget proposal would limit spending to $3,000 “for official reception and representation expenses” and to $25,000 for consultations with other regulators and officials from foreign governments, according to the draft bill.
The plan is “penny-wise and pound-foolish,” Bart Chilton, one of the commission’s three Democrats, said in a statement. “We went to the brink of economic disaster. Congress gave us the directives in Dodd-Frank to ensure that doesn’t happen again, and now there are those who would keep us from having the budget to do the job.”
The House Financial Services Committee is scheduled to consider a bill on Tuesday that would delay the mid-July deadlines for the derivatives rules until the end of 2012.