Wall Street’s watchdogs are looking at just a meager budget boost under the latest spending bill, well below what the president says they need to fulfill their expanded duties.
As part of the $1 trillion omnibus bill unveiled Monday evening, two Wall Street regulators would receive slim increases to their funding, as they grapple with expanded workloads under the Dodd-Frank financial reform law.
That’s $100 million short of the $315 million the White House requested for fiscal year 2014. The agency had warned this fall it could have to furlough employees this fiscal year for up to 14 days to make ends meet.
The other financial regulator whose budget is set by Congress, the Securities and Exchange Commission, which received a proportionally smaller boost.
That agency got just a $25 million hike to bring its budget up to $1.35 billion – a 1.8 percent increase. The White House had called for the agency to receive $1.67 billion to fulfill its duties.
The package also eliminates $25 million the SEC had kept in a reserve fund congressional critics decried as a “slush fund” free of oversight, and assigns $44 million of the SEC’s budget to its economic analysis branch.
Republicans broadly opposed Dodd-Frank, and have broadly opposed budget increases for the regulators, arguing they have ample funds while highlighting past missteps they made before the financial crisis.
However, the massive spending bill does not appear to include any provisions targeting the Consumer Financial Protection Bureau, a major GOP target coming out of Dodd-Frank. That new agency's funding falls outside the appropriations process, but Republicans have long sought to bring under congressional control, as well as make several structural changes to the agency.
Other banking regulators, like the Federal Reserve and Federal Deposit Insurance Corporation, also do not have their funding levels set by appropriators.
Advocates of Wall Street reform were furious when the package was revealed, saying those budgets are setting the agencies up to fail.
Dennis Kelleher, president and CEO of the reform advocacy group Better Markets, pointed out that both of these agencies bring in far more in fines and settlements than they cost the taxpayer. Furthermore, the SEC’s budget actually does not add to the deficit, since it collects its funds from fees assessed on the financial industry.
“The only reason not to fully fund the CFTC and the SEC is to protect Wall Street profits, bonuses and reckless trading,” said Kelleher. “This rewards Wall Street’s lobbyists and campaign cash while endangering American families.”