The head of the Commodity Futures Trading Commission decried a House appropriations subcommittee’s vote earlier this week to reduce spending for the agency in fiscal year (FY) 2013. The move comes at a time when the CFTC is gearing up to oversee the multi-trillion-dollar derivatives market.
The Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies on Wednesday approved only $180 million for the CFTC in FY 2013, a cut of $25 million from FY 2012 and $128 million below the amount that President Obama requested for the agency. The proposed funding for the CFTC is included in a bill that calls for $19.4 billion in discretionary funding for a number of Department of Agriculture, rural economic development and rancher conservation programs.
Wall Street has been lobbying heavily against reforms to regulate the derivatives market, and lower funding could potentially weaken the CFTC’s ability to rein in violators.
“The result of the House bill is to effectively put the interests of Wall Street ahead of those of the American public by significantly underfunding the agency Congress tasked to oversee derivatives — the same complex financial instruments that [in 2008] helped contribute to the most significant economic downturn since the Great Depression,” said CFTC Chairman Gary Gensler.
“The CFTC’s…staff is just 10% more in numbers than at our peak in the 1990s, yet Congress has now directed the agency to oversee the swaps markets; that is eight times larger than the futures market.” Without additional funding, he said, there could be “mayhem and loss of confidence” in the energy and agriculture markets that the CFTC oversees.
Before the spending bill can be sent to the House floor, it must first be approved by the full appropriations committee. A mark-up by the committee has not been scheduled yet, a spokeswoman said.
The Senate Subcommittee on Financial Services and General Government plans to mark up on Tuesday (June 12) an appropriations bill that will include funding for the CFTC in FY 2013. Following the mark-up, the panel will release a summary of bill, which will list the spending increases and decreases, said a spokesman for the Senate Appropriations Committee.
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