* Rep. Bachus could support funding boost for SEC
* SEC seeking $1.407 billion for fiscal 2012
* Many House Republicans oppose boosting funding
* SEC says it needs money to implement Dodd-Frank
(Rewrites to include comments from Spencer Bachus)
By Sarah N. Lynch
WASHINGTON, Sept 15 A key U.S. House Republican
expressed support on Thursday for bolstering funding for the
Securities and Exchange Commission, a sentiment that diverges
sharply from those of fellow Republicans critical of the
agency's expanding powers.
"Some of my colleagues have argued, and I think with some
persuasion, that with their expanded role there is a need for
an immediate funding increase," said House Financial Services
Chairman Spencer Bachus about his Democratic colleagues. "My
personal view is that an increase in funding is probably
necessary as part of the reform process."
Bachus' surprising comments came at the start of a House
Financial Services hearing to scrutinize the SEC's operations
due to its light regulatory touch in the lead-up to the
financial crisis and its failure to detect Bernard Madoff's
Republicans have also been critical of the extra
responsibilities the SEC received in the Dodd-Frank Wall Street
overhaul law, and have raised concerns about how well the SEC
and other regulators are analyzing the economic impact of their
Under Dodd-Frank, the SEC gained new powers to regulate
hedge funds, credit-rating agencies, municipal advisers and the
nearly $600 trillion over-the-counter derivatives market.
The SEC is under fire for several other scandals, and is
bracing for an onslaught of what are likely to be unflattering
reports by the agency's inspector general looking at everything
from document destruction to potential conflicts of interest by
the SEC's former general counsel David Becker.
Other Republicans on the panel Thursday sounded far less
open to boosting the agency's funding, even though the SEC has
argued that the fees it imposed on Wall Street firms would
offset the money appropriated by Congress.
"We have to be very careful here of rewarding bad behavior
with more money and more regulations," said Congressman Randy
Neugebauer, a Republican from Texas.
Bachus's openness to a funding increase for the SEC could
help pave the way for negotiations between the U.S. House and
Senate as they work toward a fiscal 2012 budget plan.
In June, the House Appropriations Committee refused a
request by the Obama administration to raise the SEC's 2012
budget by about $222 million from its current funding level of
$1.185 billion, instead opting to leave it flat. That bill is
now awaiting approval by the full U.S. House.
The Senate Appropriations Committee, meanwhile, is slated
later on Thursday to vote on a very different proposal that
would give the SEC its desired increase.
SEC Chairman Mary Schapiro, in testimony before the House
Financial Services Committee on Thursday, said the plan that
House appropriators have put forward would have damaging
consequences for the agency.
She said the agency needs resources to be able to conduct
exams of clearinghouses for compliance with new derivatives
rules. She also said a tight budget could force the SEC to
decline to prosecute wrongdoers if the litigation costs looked
(Reporting by Sarah N. Lynch; Editing by Lisa Von Ahn and
Gerald E. McCormick)