WASHINGTON (Reuters) - On a party-line vote, the House Appropriations Committee voted for a 12 percent cut in funding for the U.S. futures regulator on Tuesday, moving a step closer to a showdown with the Senate, where a large increase is proposed.
The House panel cleared for floor debate a bill giving the Commodity Futures Trading Commission $180.4 million in the fiscal year that opens on Oct 1, down from $205 million this year and far below the $308 million pending in the Senate.
Committee chairman Hal Rogers said the CFTC budget was up 80 percent from 2008 and the agency did not need more funding. “It just seems to me this is a big-time waste of money,” said Rogers, Kentucky Republican, of proposals for more funding.
“Who’s in charge here, taxpayers or Wall Street?” asked Marcy Kaptur, one of several Democrats who argued the CFTC cannot enforce the Dodd-Frank financial reform law without more staff and equipment. The law expanded CFTC jurisdiction to over-the-counter derivatives in response to global financial turmoil in 2008-09.
Georgia Republican Jack Kingston faulted the CFTC for not preventing or foreseeing the collapse of M.F. Global last year or J.P. Morgan’s loss of more than $2 billion in derivatives trade this year.
“We spent a lot of money. What did we get for it? Zero,” said Kingston, adding, “We’re not seeing brilliance.”
California Democrat Sam Farr proposed $224.4 million for the CFTC for the new fiscal year, a slight increase. Committee members defeated the idea, 27-19, on a party-line vote.
While the Republican-controlled House is on track to cut CFTC funding, the Democratic-run Senate is advancing a $308 million appropriation for the agency. The figure is the same as the White House recommendation.
Also on Tuesday, the CFTC said its chief economist, Andrei Kirilenko would leave the agency at the end of 2012 to become a finance professor at the Massachusetts Institute of Technology. He has worked at the CFTC since 2008 and became chief economist in December 2010. His work included analyses of algorithmic trading and computer-driven high frequency trading.
Reporting By Charles Abbott; editing by Carol Bishopric