The current round of funding for the federal government runs out on Friday, but House and Senate negotiators have reportedly agreed to a new funding package under the guidelines of the deal that raised the debt ceiling over the summer. One of the casualties of the budget cuts imposed by this agreement will be the Commodity Futures Trading Commission, a key financial market watchdog charged with implementing large swathes of the Dodd-Frank financial reform law:
Congressional lawmakers have agreed to give the Commodity Futures Trading Commission far less money than it requested for fiscal 2012, potentially limiting the agency’s ability to implement the expanded powers it received under the Dodd-Frank financial law.
Congressional aides on Monday said that the CFTC would receive $205 million for the year, $100 million less than the amount sought by the Obama administration, as part of a compromise dropping a number of proposed policy restrictions that could have delayed the implementation of Dodd-Frank rules even further. […]
Senate Democratic lawmakers had pushed for a budget of $240 million for the agency, while the Republican-controlled House wanted to keep its fiscal 2012 budget broadly flat at $170 million, from the $169 million the agency had in fiscal 2011. The administration had sought $308 million for the CFTC for fiscal 2012.
According to a study by the Government Accountability Office, the CFTC needs $77 million above last year’s funding level to adequately fulfill its new duties under Dodd-Frank. Instead, the agency is receiving about half of that amount.
The CFTC is responsible for policing the nation’s commodities markets — including the oil market, where speculation has exploded in recent years — and is also tasked under Dodd-Frank with regulating derivatives, the complex financial instruments that were at the heart of the 2008 financial crisis. Refusing to give the agency enough funding to complete these tasks is just one more way that the GOP is hoping to slow down the implementation of new financial regulations.
“[Republicans are] trying to sabotage the situation by not giving money,” said House Financial Services Committee ranking member Barney Frank (D-MA). “These are complicated subjects that involve very smart people, and we need technology and resources for these agencies.” As the New Republic’s Timothy Noah suggested, perhaps its time for the Occupy protesters to visit House Appropriations Committee Chairman Hal Rogers (R-KY) and “ask why he’s starving the financial watchdogs.”