Both the CFTC and SEC were set to get major budget increases for 2011, but with spiked spending bill, all bets are off.
The Commodity Futures Trading Commission is working to write rules at breakneck speed. Where in a typical year they would write six rules, today they are writing nearly six rules a week. Clearly they need help. For now however, the Commission, along with fellow Dodd-Frank rule writer the Securities & Exchange Commission, will have to wait.
With last Thursday’s failure in Congress of a government spending bill for 2011, both the agencies will have to make do with what they have until a new spending bill is agreed to. And both were eyeing big increases. According to the Wall Street Journal, the SEC was looking at an increase to about $1.3bn for the remaining nine months of fiscal year 2011 vs. a $1.1bn budget for 2010. The CFTC was looking at a much larger increase to $286mn for next year vs. about $169mn in 2010 (although there were some reports it was more like $261mn). Both agencies hope to hire hundreds of staff as well as in the case of the SEC, upgrade technology.
Although the failure of the measure had nothing to do with either regulator, i.e., neither was a target –the nearly $8bn in earmarks were – they nonetheless could face obstacles getting their allotment given that Republicans will take control of the House in January. That’s because many Republicans question why a regulator such as the SEC should get more funding when it failed to prevent the widespread fraud and abuse that led to the economic crisis in the first place.
According to Bloomberg News, the agencies since Oct. 1, have been operating on “extensions” of last year’s budgets, which has forced them postpone action on many Dodd-Frank directives.
In his wish list for the coming year, CFTC commissioner Scott O’Malia expressed gratitude for the “very generous budget,” and hoped he and his colleagues could help in reducing the overall US budget deficit by eking out savings where it could. Now he may not get that chance.