The House on Tuesday began debating a Continuing Resolution (CR) bill that would fund the federal government until September. Published reports say that the House hopes to pass the bill by Thursday and send it to the Senate for passage before the CR expires on March 4. If the bill is not passed, the federal government could face a shut down.
The CR extends federal funding for the remainder of 2011 but includes $100 billion in proposed cuts. For instance, under the FY 2011 CR that the House is debating this week, the Securities and Exchange Commission (SEC) would see a budget cut of $41 million below the current CR that the regulator is operating under that was passed in December 2010 and expires on March 4.
The $41 million cut is based on the fact that the continuing resolution for the current fiscal year (2010), last passed in December, gave the SEC the authority to spend $1.1 billion. The House Republican resolution for the rest of 2011 would cut $41 million from the earlier appropriation to $1.069 billion.
Rep. Barney Frank, D-Mass., ranking member of the House Financial Services Committee and former chairman of that committee, introduced an amendment on Feb. 14 to the FY 2011 CR that would provide $131 million more in funding for the SEC by taking funds from various sources like the Treasury Department and the Internal Revenue Service (IRS).
President Obama’s 2012 budget, released Monday, would give the SEC a 28% funding increase to $1.427 billion--a 27% boost over the current CR funding level.
Republican opposition to a funding increase for market regulators was reiterated again in comments made by Rep. Scott Garrett, R-N.J., during a Tuesday hearing held by the House Financial Services Committee, which examined the Regulatory, Economic and Market Implications of the Dodd-Frank Derivatives Title.
Rep. Carolyn Maloney, D-N.Y., a member of the House Financial Services Committee, pointed to the FY 2011 CR that the House is debating and noted that it includes a “drastic cut” in SEC funding in comparison to Obama’s FY 2012 budget boost for the securities regulator. Maloney asked SEC Chairman Mary Schapiro (left) if the SEC would be able to fulfill its numerous duties under Dodd-Frank under such a budget cut. Schapiro responded: “No.” Maloney went on to say that Congress needed to “give the tools to the oversight agencies to get the job done.”
But Garrett, chairman of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, argued in response that in their current funded state, the SEC and CFTC had managed to come out with numerous studies and rules mandated under Dodd-Frank, adding that further compliance with Dodd-Frank does not necessary equate with “spending more money.” Garrett did, however, question whether the “extremely expedited” deadline of July for the SEC and CFTC to come out with derivatives rules under Dodd-Frank is doable. Gary Gensler, chairman of the CFTC, responded that he believes it is doable.