Congress is poised to boost significantly funding for the Securities and Exchange Commission so that the agency can fulfill scores of new financial-regulatory-reform responsibilities.
Congress is poised to boost significantly funding for the Securities and Exchange Commission so that the agency can fulfill scores of new financial-regulatory-reform responsibilities.
The Senate Appropriations Committee has approved increasing the SEC’s budget by $205 million to $1.3 billion for fiscal-year 2011, an 18% bump over fiscal-year 2010 — and $41.5 million, or 3%, over the Obama administration’s budget proposal this year.
At a panel meeting Thursday, Sen. Richard Durbin, D-Ill., and chairman of the Senate Appropriations Subcommittee on Financial Services, said the totals represent “dramatically increased spending” for the SEC.
“We want to catch tomorrow’s Bernie Madoffs today,” Mr. Durbin said. The funding, he continued, “means putting more investigators, more attorneys and more technology to work at the SEC.”
On the other side of the Capitol on Thursday, a House Appropriations subcommittee approved the same $205 million increase for the SEC.
It is unclear when the full House and Senate will act on agency allocations. The federal budget is typically a volatile issue on Capitol Hill — and likely to be even more so in an election year when the massive federal deficit is becoming a campaign issue.
If a budget is not approved by the end of September, Congress will have to pass a continuing resolution to keep federal agencies operating at current funding levels.
That situation would pose a challenge to the SEC. The 2,300-page financial-reform legislation signed into law July 21 by President Barack Obama requires that it undertake 95 rulemakings and conduct 17 studies — most within the next two years — according to an analysis by the law firm Davis Polk & Wardwell LLP.
SEC Chairman Mary Schapiro told a House Financial Services subcommittee July 20 that the agency will have to hire 800 additional staff members to carry out its financial-reform duties. She said that Mr. Obama’s budget proposal will enable it to hire 374 people. It’s not clear whether the congressional appropriation will allow for the hiring of all 800.
Although the Senate Appropriations Committee approved the financial services bill along party lines 18-12, partisan disputes revolve around differences between Democrats and Republicans on the overall level of federal spending.
Support for the SEC, however, comes from both sides of the aisle.
“Restoring the confidence of investors in the integrity and fairness of financial markets is critical to our economic recovery,” said Sen. Susan Collins, R-Maine, and ranking member of the Financial Services Appropriations Subcommittee. “The increases in this bill will help [the SEC] meet those responsibilities.”
But Ms. Collins also challenged the SEC to improve its management and ensure that its culture focuses on results and accountability.
“After all, senior employees at the SEC spending their time viewing porn at work, rather than investigating the next Bernie Madoff, is not a problem more money can solve,” Ms. Collins said.
