The House and Senate have moved Wednesday's vote to Thursday on a final budget agreement in the form of a Continuing Resolution (CR) that would fund the government until Sept. 30 and cuts more than $38 billion in federal spending.
However, according to the Senate Appropriations Committee, the CR would give the Securities and Exchange Commission (SEC) a budget boost of $74 million over its current FY2010 funding level. Under the 2011 CR, the SEC is funded at $1.185 billion, a $74 million increase over the 2010 CR that the SEC is currently operating under.
The Commodities Futures Trading Commission (CFTC) would see a $34 million budget increase.
After the Wednesday vote, the House and Senate will then move on to consider the Obama administration’s Fiscal Year 2012 budget.
The budget boost for the SEC is welcome news, as the agency has been bracing for further budget cuts. However, the $90 million increase, which would raise the agency’s annual budget to $1.19 billion, is still short the $1.3 billion budget that was authorized under Dodd-Frank for 2011.
SEC Chairman Mary Schapiro (left) told AdvisorOne in a recent interview that “It’s hard to be too specific about how investors in the market will be most affected by cuts in our funding, because it really does depend on how deep the cuts are.” The SEC, she said, “will have to make very difficult choices if the cuts are deep about what priorities we can continue to support and which of our activities, while still very important, are just ones we’re not able to support without additional resources.”
The House Appropriations summary of the final CR says that it will include a total of $1.049 trillion in funding, a nearly $40 billion reduction from last year’s (fiscal year 2010) levels. This includes the $12 billion in reductions previously approved by Congress and signed into law under the previous three continuing resolutions, as well as nearly $28 billion in additional new spending cuts.
The funding cuts, according to the House Appropriations summary, are as follows:
Financial Services: The Financial Services and General Government section of the CR contains a total of $22 billion, a $2.4 billion, or 10%, reduction from fiscal year 2010 levels, and a reduction of $3.4 billion, or 14%, from the President’s fiscal year 2011 request.
The CR reduces most Treasury and Executive Office of the President accounts and reduces funding for construction of new federal buildings by more than $800 million. The bill provides a $13 million increase over last year for the Inspector General of Troubled Asset Relief Program (TARP) to provide strong oversight of the billions of dollars remaining in TARP assets and continues current funding for drug task forces and programs to assist small businesses.
Agriculture: The CR funds Agriculture programs at $20 billion, which is $3 billion below the fiscal year 2010 enacted level and $3.2 billion below the President’s 2011 budget request.
Commerce, Justice, Science: The Commerce, Justice, Science section of the CR contains a total of $53.4 billion, a $10.9 billion, or 17%, reduction from fiscal year 2010 levels, and a reduction of $7.1 billion, or 12%, from the President’s fiscal year 2011 request.
Defense Funding: The Department of Defense is funded at $513 billion in the CR–approximately $5 billion above last year–providing the necessary resources for the safety of the nation’s troops and the success of our nation’s military actions. The bill also includes an additional $157.8 billion for overseas contingency operations (emergency funding) to advance the nation’s missions abroad.
Energy and Water: The Energy and Water section is funded at $31.8 billion in the CR. This is a 10% reduction–or $3.6 billion–from the President’s fiscal year 2011 request, and a 5% reduction–or $1.7 billion–from fiscal year 2010 levels.
Homeland Security: A total of $41.8 billion in discretionary funding is provided for the Department of Homeland Security (DHS) for fiscal year 2011. This is $784 million, or 2%, below FY 2010, and $1.9 billion, or 4%, below the President’s fiscal year 2011 request.
Interior: The CR includes $29.6 billion in discretionary funding in the Interior and Environment section of the bill, which is 8.1%, or $2.62 billion, below the fiscal year 2010 enacted level and 8.5%, or $2.8 billion, below the President’s request.
The Labor, HHS, Education and Related Agencies: the CR contains a total of $157.7 billion, roughly a $5.5 billion, or 3.36%, reduction from fiscal year 2010 levels. The bill is also nearly $13 billion, or 7.6%, below the President’s fiscal year 2011 request.
Legislative Branch: Legislative Branch is reduced by $103 million from last year’s levels. Of this amount, funding for the U.S. House is reduced by $55 million from last year–or 53% of the total cut–and reflects a 5% cut in Member, Committee, and Leadership office expenses except for the Appropriations Committee, which offered a larger cut of 9%.
Military Construction/Veterans Affairs: Military Construction/Veterans Affairs programs will receive $76.6 billion in discretionary funding–an increase of $3.4 billion over the President’s fiscal year 2011 request and an increase of $600 million over last year’s level.
State and Foreign Operations: The funding level for the State Department and Foreign Operations in the CR is a total of $48.3 billion–a $504 million reduction from last year’s level and an $8.4 billion reduction from the President’s fiscal year 2011 request.