The House Thursday narrowly passed an agriculture spending bill that reduces fiscal year (FY) 2012 funding for the Commodity Futures Trading Commission (CFTC) by about 15%.
By 217-203, the House approved $125.5 billion in discretionary and mandatory funding for the Department of Agriculture and related agencies, which was more than $7 billion less than what President Obama requested. It sets CFTC spending at approximately $172 million in FY 2012, which would be $30 million less than the $202 million budget for the current year (see Daily GPI, June 16). And it would be $136 million below the $308 million requested for the CFTC by the Obama administration in the next fiscal year, which begins on Oct. 1. Some of the funding could be restored by the Senate.
The House approved by voice vote an amendment by Rep. Rosa DeLauro (D-CT) in which she expressed support for funding the CFTC at the president’s requested level, but it had no budgetary impact.
The proposed FY 2012 budget cut for the CFTC comes as the sweeping Dodd-Frank Wall Street Reform Act is poised to go into effect, requiring the CFTC to regulate for the first time the multi-trillion dollar derivatives market in addition to overseeing the futures market. The derivatives market has been estimated to be about nine times larger than the futures market.
Testifying before the Senate Agriculture Committee Wednesday, CFTC Chairman Gary Gensler said “far greater resources are needed for the public to be protected. Without sufficient funding for the agency, our nation cannot be assured of effective enforcement of new rules in the swaps market…it would hamper our ability to seek out fraud, manipulation and other abuses at a time when commodity prices are rising and volatile.”
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