As House Republicans begin to move legislation this week that would roll back parts of the Dodd-Frank financial reform law, a prominent Senate Democrat indicated today that he will fight efforts to scuttle or delay implementation.
As House Republicans begin to move legislation this week that would roll back parts of the Dodd-Frank financial reform law, a prominent Senate Democrat indicated today that he will fight efforts to scuttle or delay implementation.
Sen. Richard Durbin, D-Ill., warned that slowing down Dodd-Frank would make the country vulnerable to another financial crisis.
“We've got to push ahead on this law,” Mr. Durbin said at a hearing of the Senate Appropriations Subcommittee on Financial Services and General Government. He is the chairman of the panel and also is assistant majority leader.
The Securities and Exchange Commission received a $74 million increase in its $1.18 billion funding level in the budget that Congress passed in April for the remainder of fiscal 2011, which runs through September. That bump is still far less than the SEC says that it needed for this fiscal year to implement Dodd-Frank.
But the House, led by a Republican majority that has put spending cuts at the top of its agenda, recently approved a budget blueprint for fiscal 2012 that would peg the SEC budget at $906 million, a $212 million cut from fiscal 2010.
At today's Senate hearing, SEC Chairman Mary Schapiro reiterated that the fiscal 2012 funding proposal would force the SEC to cut its 3,800-member staff by about 1,000 and would cause the agency to forgo critical information technology investments. The commission also would have to reduce the number of investment adviser examinations it performs significantly and cut back on enforcement cases.
“We oversee financial firms that spend more on their technology operations than the SEC spends on its entire budget,” Ms. Schapiro testified.
She reminded lawmakers that the SEC pays for itself through fees it charges for securities registration and other activities. The amount of money that the SEC can spend each year, however, is dictated through the congressional appropriations process.
Senate Republicans are likely to join their House GOP colleagues in taking a dim view of budget allocations for the SEC and other financial regulators.
“Simply increasing funding does not mean that an agency can successfully achieve its mission,” said Sen. Jerry Moran, R-Kan., the ranking Republican on the Senate appropriations subcommittee.
When given a chance by Sen. Frank Lautenberg, D-N.J., to pin overlooking the Bernie Madoff Ponzi scheme on budget difficulties, Ms. Schapiro demurred.
“I can't blame the SEC's failure to catch Madoff much earlier … solely on a lack of resources,” she said. Among other problems, she cited breakdowns in coordination between enforcement and examiners, and lack of supervision of frontline examiners.
As she does in all of her Capitol Hill appearances, Ms. Schapiro highlighted structural reforms made over the last two years to improve the agency's operations.
