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Obama Administration Threatens to Veto House Bill With Below-Requested Funds for SEC

Bruce Carton | June 29, 2012

We are turning the corner toward the fourth quarter of FY 2012, so it must be time for some SEC budget skirmishes, right?

For fiscal year 2013, the SEC requested $1.566 billion, an increase of $245 million above the agency's FY 2012 appropriation. This request was accepted and included in the Obama Administration's formal FY 2013 Budget request. 

However, it became clear this month that the House and the Senate have very different ideas about the proper budget for the SEC. Last week, the House passed a bill that provided only a $50 million increase for the SEC for FY 2013. In addition, the money under the House bill reportedly comes with strings attached, as it cannot be used to implement Dodd-Frank. The Senate, on the other hand, passed a bill earlier in June that would appropriate the full $1.566 billion requested by the Administration.

In explaining the House's decision to not provide the SEC with the increase, Rep. Jo Ann Emerson (R), Chair of the financial services subcommittee, said that the SEC's funding increased 6.6% in FY 2011 and 11.5% in FY 2012 -- increases that few other agencies have received, she said. In addition, she stated her belief that “The SEC's problems are not due to lack of funding. They are due to poor implementation of information technology, poor economic analysis, a burdensome organizational structure and a history of not holding their employees accountable.” Democrats such as Rep. Norm Dicks countered that the bill underfunded the agency as part of an effort to "undermine the implementation of the Dodd-Frank Act.” 

Today, the Obama Administration issued a statement noting its strong opposition to the bill. "If the President were presented with H.R. 6020, his senior advisors would recommend that he veto the bill," the Administration stated. The bill addresses far more than SEC funding, but on that specific point, the Administration wrote:

Securities and Exchange Commission (SEC). The Administration strongly opposes total resources included in the bill for SEC, which is $245 million below the FY 2013 Budget request, including a provision preventing obligation of funds from the Commission's non-appropriated Reserve Fund. Taken together with onerous mandated increases in information technology funding in excess of amounts requested, the bill would require SEC to reduce staff policing U.S. securities markets and enforcing Federal securities laws, threatening the stability of our markets and the health of our economy.