* SEC fiscal 2012 budget up 28 pct under Obama plan
* CFTC would see budget up 82 pct to $308 million
* CFTC's Chilton: Request "an admirable equilibrium"
* House Republicans have proposed cuts to both agencies
(Adds details on CFTC, SEC spending)
By Sarah N. Lynch and Christopher Doering
WASHINGTON, Feb 14 The White House proposed on
Monday large funding increases for U.S. market regulators, a
move likely to come under fire from Republicans who oppose key
provisions in the Dodd-Frank financial reform law.
The Obama administration's fiscal 2012 budget proposes
giving the Securities and Exchange Commission a 28 percent
funding increase to $1.427 billion compared to fiscal year 2010
actual spending levels.
The Commodity Futures Trading Commission would see an 82
percent spending jump to $308 million, but $117 million of that
total would be offset through a user fee on financial firms
that is unlikely to draw support in Congress.
"President Obama's request presents an admirable
equilibrium," CFTC Commissioner Bart Chilton told Reuters.
"It proposes both fiscal restraint and needed resources for
market oversight and enforcement," he said.
Dodd-Frank was enacted last year in response to the
2007-2009 financial crisis. U.S. regulators have said they will
need more funding to write and enforce dozens of rules required
by Dodd-Frank, including authority to oversee the $600 trillion
over-the-counter derivatives market as well as hedge funds and
private equity funds.
Graphic showing CFTC budget: r.reuters.com/nek97r
Full budget coverage: [ID:nN11152338]
Republicans who now control the House of Representatives
have questioned funding boosts for regulatory agencies as they
look to cut government spending and seek to throttle
enforcement of Dodd-Frank by starving regulators of additional
Congress did not finish its budget process for fiscal 2011
before the November elections, leaving government budgets
frozen at 2010 levels. Congress has to agree by March 4 on
continuing funding for the government for fiscal 2011, which
ends Sept. 30.
Republicans proposed late on Friday cuts to spending for
the remainder of the current fiscal year, with the CFTC hit
House appropriators said they wanted to slash $56.8 million
from the CFTC's current funding of $168.8 million for 2011,
while the SEC's would be lowered $25 million from the current
level of $1.1 billion. [ID:nN11200912]
The Republican plans have drawn the ire of Democrats,
including Barney Frank, the top Democrat on the House Financial
Services Committee and co-author of Dodd-Frank.
Frank told Reuters last week he thinks withholding funding
from the SEC and CFTC will fuel public anger, and possibly put
pressure on Congress to come through with the money. "I think
ultimately, both agencies will be funded," he said.
The budget freeze has begun to affect day-to-day operations
at the agencies.
The SEC has already put several Dodd-Frank initiatives on
hold, including the creation of new offices to oversee
credit-raters and facilitate the handling of whistleblower tips
and complaints. The CFTC has been forced to curb travel for
employees and delay hiring staff.
The SEC, through filing fees its charges securities
issuers, has consistently been a net contributor to the
government's coffers, but Congress has set its annual budget.
A provision in Dodd-Frank requires the SEC to adjust the
fees it charges the industry so they will offset the amount
Congress appropriates starting in 2012. Anything collected
beyond that amount would be classified as "discretionary
The law also lets the SEC deposit $50 million from fee
collections into an emergency fund.
(Reporting by Sarah N. Lynch and Christopher Doering; Editing
by Tim Dobbyn)