* US gasoline up 30 cents in past month at $3.87/gal
* Adequate funding highlighted by rising gas price: Gensler
* CFTC looking at emergency power authority
* Lawmakers say CFTC moving too slow on position limits
By Christopher Doering
WASHINGTON, March 21 The head of the U.S.
regulator in charge of ridding commodity markets of fraud and
manipulation implored lawmakers on We dnesday to think of
consumers paying more for gasoline as Congress decides how much
money to give his agency.
Gary Gensler, chairman of the U.S. Commodity Futures Trading
Commission, warned that without sufficient funding, his agency
would struggle to employ new market-surveillance tools to target
"Given the dominance of financial actors and speculators in
these markets, it's that much more crucial that the CFTC is well
funded so that we can ensure these markets work for hedgers,"
Gensler told a Senate Appropriations subcommittee.
Gensler said he fills up his car "a lot" to handle frequent
trips between Washington and Baltimore, where he has family.
"The need for adequate funding is highlighted by rising gas
prices at the pump," he said, noting the CFTC is responsible for
ensuring the market is transparent and free of illegal activity,
but that it is not a price-setting agency.
U.S. gasoline prices have jumped nearly 30 cents in the past
month, pushing the national average to $3.87 a gallon, according
to the Energy Information Administration. With elections
scheduled for November, the price surge has led to
finger-pointing between Republicans and Democrats in Congress.
Gensler's call for funding comes the same day that five
Democratic senators and one independent accused the chairman of
not moving fast enough on efforts to curb excessive speculation.
The six senators, in an effort to lower skyrocketing fuel
prices, unveiled legislation that would require the CFTC to use
its emergency powers to impose position limits in oil futures
markets within 14 days of the measure becoming law.
"I think that Chairman Gensler doesn't understand the
urgency of the moment and the pain that millions of people are
feeling right now at the gas pump," said Senator Bernie Sanders,
the independent member of the group.
Gensler told lawmakers on the Senate panel he had asked the
CFTC's general counsel to brief the agency's commissioners on
its emergency power authority and how that was used four times
in the late 1970s. He said he did not believe Congress had the
authority to force the CFTC to use its emergency power.
But when pressed on whether the CFTC could or should use the
emergency authority on rising gas prices, Gensler was careful
not to tip the agency's hand, frustrating lawmakers.
"I understand the nature of your answer but I think you are
carefully avoiding saying where there has been specific factual
inquiry," said Senator Richard Durbin, chairman of the
The White House last month proposed a big budget boost for
the CFTC, which is months behind in implementing Dodd-Frank
financial reforms. The regulator would receive a 50 percent
spending jump to $308 million from $205 million in fiscal 2012
under its 2013 budget.
However, the chances of the CFTC getting the full budget
hike are slim, due to congressional resistance.
Position limits were part of the 2010 Dodd-Frank law,
designed to bring tough oversight to Wall Street, including
limiting excessive speculation.
The CFTC narrowly passed a position-limits rule in October
2011, but the agency must first define a swap and collect market
data before the regulation can go into effect. The rule also has
been challenged in the court system by the financial industry,
which said the measure went too far.
The regulator faces a daunting to-do list, including
implementing the new responsibilities it received from
Dodd-Frank, and the investigation into the collapse of futures
trading firm MF Global that has been ongoing since late October.