House funding debate draws out SEC weaknesses

A Democratic proposal to increase funding for the Securities and Exchange Commission beyond the House Republican proposal for fiscal 2011 has led to sharp divides between the parties over whether to put more money into the agency.

Rep. Barney Frank (D-Mass.) proposed adding $48 million more to the SEC budget, which the Republicans have proposed be set at $1.1 billion. Frank said more money is needed because Congress last year passed the Dodd-Frank financial reform law, giving the SEC more responsibilities.

But Rep. Jo Ann Emerson (R-Mo.) had a long list of reasons at the ready for why Republicans are not interested. She said that despite having its budget more than double over the last decade, the SEC has missed two major Ponzi schemes and been unable to get its own financial books in order.

"How is it also that the agency that's in charge, and needs to be in charge of regulating our financial markets, can't even produce an accurate financial statement of their own since 2004, in spite of the fact that since 2001 we've increased their budget by 153 percent?" Emerson asked.

She also noted that the SEC has been sloppy in managing the space it leases for its employees and over-leased space, wasting money. Emerson suggested that the SEC may have enough money, but is not using it wisely.

Rep. Scott Garrett (R-N.J.) added that Frank's amendment would pull money from General Services Administration, which could have unforeseen consequences.

Like many other amendments being discussed Thursday, Frank's SEC amendment is likely headed for a voice vote by day's end.