The spending measure for fiscal 2011 that passed the House early on Saturday, Feb. 19 contains immediate funding cuts for federal regulators working to implement the Dodd-Frank financial law. Under the measure, the Commodity Futures Trading Commission would see its current $168 million budget slashed by a third for the remainder of this fiscal year, which ends in about six months.
The bill would cut the Securities and Exchange Commission's funding by $25 million from about $1.1 billion for the current fiscal year, reductions that regulators say would result in layoffs at both commissions.
CFTC Chairman Gary Gensler said the measure would force him to cut his staff of 680 to well below the 440 staff the agency had in 2008. He said the cuts would harm the regulator's ability to police the futures markets and would create a backlog of traders and firms seeking to register with the agency.
Meanwhile, SEC Chairman Mary Schapiro said SEC would have to cut 600 staff positions and wouldn't be able to open the five new offices, implement the 93 new rules and carry out the 20 new studies that the Dodd-Frank law requires. The cuts would "have a very real effect on the SEC's ability not just in respect to Dodd-Frank, but also our core mission," Schapiro said.
The Obama administration, in its 2012 budget plan, is seeking to boost CFTC's funding to $308 million by charging $117 million in user fees. The president's proposal also would increase the SEC's funding by around $300 million to roughly $1.4 billion.
