Later On

A blog written for those whose interests more or less match mine.

Congress considers funding SEC

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Elana Schor in the Washington Independent:

During George W. Bush’s ill-fated push to privatize Social Security, conservatives condemned the use of surplus retirement taxes to help offset the deficit. But few Democrats or Republicans decry the government’s custom of padding its coffers with fees from an agency with a mission that’s more significant than ever: the Securities and Exchange Commission.

For two decades, the SEC has made more money in fees from the entities it regulates than it receives from Congress through the budget process – about $350 million more in this year alone. With the agency taking heat for its Bush-era enforcement lapses, most notably the failure to stop Bernie Madoff’s infamous fraud, lawmakers and advocates are debating the right amount to spend to ensure stronger financial cops on the beat.

Illustration by: Matt Mahurin

Illustration by: Matt Mahurin

Sen. Dick Durbin (D-Ill.), chairman of the appropriations panel that funds the SEC, unveiled a bill Wednesday that would give the agency $1.13 billion for the next fiscal year – an increase of $100 million, or nearly 10 percent, above the Obama administration’s request.

Debating budgets for financial regulators may sound “as dry as dust,” Durbin acknowledged at a hearing of his subcommittee last month.

“But if you step back for a moment and translate their work into the real world,” he added, “you realize that their oversight … protects the savings and futures of American families, and ensures that economies in countries around the world will view our economy and the way we run it with respect.”

Given those stakes, the argument for beefing up enforcement spending at the SEC appears easy to make. Yet the tight fiscal times pose challenges; Sens. Chuck Schumer (D-N.Y.) and Richard Shelby (R-Ala.) won approval in April to give the agency an extra $20 million in 2010, but appropriators in the House have signed off on only half that number.

The money makes a real difference for SEC officials, who have seen their technology budget shrink by more than half since 2005 and their numbers of investigative attorneys remain more than 11 percent below 2004 levels, according to a recent Government Accountability Office study.

“It’s an ongoing problem the agency has dealt with,” Barbara Roper, director of investor protection at the Consumer Federation of America, said in an interview. “In the past couple of decades, there hasn’t been a careful review of the resources the agency needs to do its job effectively, what the real funding level of the agency should be.”

SEC Chairman Mary Schapiro told Senate appropriators last month that the White House budget request for 2010 would not allow her to hire more staffers than the agency has already brought on board this year.

Schapiro is seeking to add 1,000 positions for 2011 – nearly as many people as now work in SEC enforcement – which still would leave the agency smaller than the Federal Deposit Insurance Corporation.

The FDIC supervises about half as many financial institutions as the SEC…

Continue reading.

Written by Leisureguy

9 July 2009 at 10:56 am

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