By Peter Schroeder - 04/07/11 03:17 PM EDT
Democrats blasted Rep. Paul Ryan's (R-Wis.) budget proposal Thursday, arguing it is a backdoor way to "kill" Wall Street reform by starving regulators.
Ryan's budget proposal would return the budgets of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to fiscal 2008 levels, while the Obama administration is pushing for hundreds of millions more as they work to implement major parts of the Dodd-Frank financial reform law.
Rep. Barney Frank (D-Mass.), the ranking member of the House Financial Services Committee, accused Republicans of using the budget to stifle Wall Street reform.
While Congress sets the SEC's budget, the funds come from fees it assesses on financial firms, and Frank said the CFTC's budget is too small to play a major role in the nation's fiscal picture.
According to Frank, the budgets for the two agencies combined amount to "less than a week's munitions in Libya."
"There is no budget justification," he said. "This is an effort to do, under the guise of deficit reduction ... what they can't do directly, and that's re-deregulate much of the country."
"This is cutting the ability of government to enforce reforms that we put in place in the financial regulatory reform bill," added Rep. Carolyn Maloney (D-N.Y.).
Republicans have argued the agencies do not deserve larger budgets, given that they were unable to protect against the financial crisis. Frank dismissed that line of thinking as "wholly illogical."
"If police failed to do a good job of catching criminals, the response is not to have fewer police," he said.
He also contended that a recent Republican push to modify the new Consumer Financial Protection Bureau (CFPB) so that it would be run by a bipartisan commission, rather than a single director, is simply an effort to stifle it.
Under the bill backed by House Financial Services Committee Chairman Spencer Bachus (R-Ala.), the five commission's members would face Senate confirmation. Republicans have argued the CFPB is too powerful a bureau to be run by a single person, but Frank painted filling the commission as a gargantuan task.
"Getting five confirmations through the Senate?" he asked. "If a fire broke out in the Senate, we would have mass asphyxiation because you could not get 60 votes to adjourn."
However, he did say that if the Senate can pass legislation delaying new limits on debit card fees, the House would promptly send it to the president.
"If something passes the Senate, I believe it will go through the House very quickly," he said. "It really depends on the Senate."
Sen. Jon Tester (D-Mont.) said Wednesday he believes he has the needed 60 votes to pass his bill delaying the new caps for two years, but the timing of a vote is not yet known.