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September 14, 2011 at 08:00 PM
WASHINGTON BUREAU — U.S. Securities and Exchange Commission (SEC) Chairman Mary Schapiro has accused House Republicans of trying to cripple the agency by holding its budget flat and imposing burdensome cost-benefit analysis requirements.
Schapiro talked about the proposals today at a House Financial Services 
Committee hearing on efforts to change the way the SEC operates.
One bill discussed at the hearing, the SEC Modernization Act of 2011 draft, which has no bill number, would restructure the agency.
The other bill, H.R. 2308, would establish stringent cost-benefit analysis criteria that the agency would have to use when justifying regulations.
Members of the Senate Appropriations Committee agreed Wednesday to approve a bill that would provide about $1.4 billion in funding for the SEC, increasing the agency’s funding level 19% from the current level.
The bill approved would offset the extra spending by increasing securities transaction fees and use the increase to pay for investing in information technology upgrades, implementing Dodd-Frank Wall Street Reform and Consumer Protection Act mandates, and hiring more legal and investigative staff.
In July, the House Appropriations Committee voted to hold SEC funding for the fiscal year that starts Oct. 1 to less than $1.2 billion, or an amount equal to the level of funding in effect this year.
Members of the committee said they were holding SEC funding flat because of a need to cut federal spending in general. They also cited the SEC’s failure to prevent the financial crisis that started in 2007.
“We are looking for savings where ever we can find them,” Schapiro said.
But “we cannot operationalize the Dodd-Frank rules without additional resources,” Schapiro said. “We are taking derivatives, hedge funds, etc under our oversight and, without additional resources, even if we become more efficient, at the end of the day there is a gap.”
Rep. Spencer Bachus, R-Ala., chairman of the panel, defended his SEC restructuring proposal, noted that it was just a draft, and said he is open to revising it.
The draft is “merely an attempt to start the discussions,” Bachus said.
