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House Committee's Budget Analysis Takes Dim View of SEC Money Management

Tuesday, March 18, 2014
By Rob Tricchinelli

March 14 --The House Financial Services Committee ripped the Securities and Exchange Commission for inefficient money management strategies, in its “views and estimates” on President Obama's proposed fiscal year 2015 budget, which it endorsed in a party-line vote March 14.

The report was adopted by a 32-25 vote, with all present committee Republicans in favor and all Democrats opposed.

The White House requested $1.7 billion to fund the SEC in fiscal year 2015, an increase from the $1.35 billion budgeted for 2014.

The committee report called out the SEC's performance leading up to the financial crisis. “Since 2004, the SEC's budget has increased by more than $539 million,” the report said. “However, the increased budget has not necessarily been reflected in an increase in the level of the SEC's performance.”

An SEC spokesman declined to comment on the report.

Commentary
Discussion of the SEC's budget during the March 13 committee markup fell predictably along party lines. “The SEC, obviously, is not a good steward of its funds,” Rep. Scott Garrett (R-N.J.) said. “We could go down the list of the failures that they have made over the years despite the fact money was thrown at them.”

“The SEC has not made the case they deserve additional funding,” Garrett, who chairs the House Financial Services Capital Markets Subcommittee, said.

Democrats, however, supported more funding for the commission. “The enforcement teams of the SEC, they bring cases against entities that spend more on lawyers' fees than the agency's annual operating budget,” Rep. Carolyn Maloney (D-N.Y.) said.

Defeated Amendment
Rep. Stephen Lynch (D-Mass.) offered an amendment to the report recommending that the SEC be funded at the administration's suggested level. “We can't afford to repeat the mistakes of past with an ineffective financial regulator at the SEC,” Lynch said. “We need to give the SEC the resources it needs to carry out the duties Congress has given it.”

The amendment was defeated, 26-31, in a vote along party lines.

To contact the reporter on this story: Rob Tricchinelli in Washington at rtricchinelli@bna.com

To contact the editor responsible for this story: Phyllis Diamond at pdiamond@bna.com


To see the committee's views and estimates, visit http://financialservices.house.gov/uploadedfiles/fy15_budget_views_and_estimates.pdf

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