GOP targets funding of Consumer Bureau

Republicans have opened up another front on the Consumer Financial Protection Bureau (CFPB) in their latest appropriations legislation.

The House Appropriations Committee on Wednesday released its fiscal 2012 appropriations bill for financial services, and it includes several efforts to curb the contentious new agency created by the Dodd-Frank financial reform law, as well as the law itself. The measure is scheduled to be marked up by the relevant subcommittee Thursday.

All told, the $19.9 billion in funding included in the bill is nearly $2 billion below last year’s level and $6 billion below the president’s budget request, the committee said.

{mosads}”This bill exemplifies the commitment of the Republican majority to reduce spending, dig our nation out of record deficits, and rein in unnecessary agency regulation and interference that obstructs economic growth. The funding in this bill is below the pre-stimulus, pre-bailout levels of 2008, and important provisions are included to prevent government overreach in a variety of areas,” said committee Chairman Hal Rogers (R-Ky.).

Notably, the bill would bring the CFPB’s budget under the purview of appropriators starting in 2013. Currently, its funding falls outside the reach of lawmakers, as it receives transfers from the Federal Reserve to fund its operations.

Republicans contend bringing the agency’s budget under the appropriations process will provide for better oversight of it. But CFPB backers — including Elizabeth Warren, the architect of the fledgling entity — contend such a move would simply allow Republicans to slash the bureau’s budget. Warren has been quick to point out that no other banking regulator has its budget set via appropriations.

The bill would limit the mandatory funds provided to the CFPB to $200 million — less than half of what it can receive currently. The move serves to effectively cap its spending before bringing it under the appropriations process. Under Dodd-Frank, CFPB funding levels are set as a percentage of 2009 Federal Reserve spending. In fiscal 2012, the CFPB expected to receive a maximum of roughly $550 million.

The Securities and Exchange Commission (SEC), which is currently working to write a huge number of rules to implement Dodd-Frank, would see its budget hold steady in 2012 at $1.2 billion. Republicans had previously pushed to cut the agency’s budget, but the new bill still comes up short of the president’s request, which called for a $222 million hike.

The bill also would eliminate a new “reserve fund” established for the SEC, as Republicans contend it would effectively be a “slush fund” for SEC programs not approved by Congress. Dodd-Frank established that fund, which can be as large as $100 million.

The Treasury Department would receive $12.2 billion in the bill, $929 million below last year’s level. The IRS would see its budget cut by $606 million, to $11.5 billion, under the measure.

The Office of Financial Stability, which administers the Troubled Asset Relief Program (TARP) for the Treasury, would see its funding capped at $200 million. In addition, the bill would terminate the Home Affordable Modification Program (HAMP), an underperforming mortgage assistance program administered by the office. House Republicans already approved legislation eliminating the program earlier in the year.

{mosads}In fact, only funding for Terrorism and Financial Intelligence and the department’s TARP watchdog would receive funding increases under the measure.

The Executive Office of the President would see its funding cut across the board, dropping $66 million, to $640 million. The Office of Management and Budget (OMB) would see its budget cut by 10 percent. It also requires that office to produce regular reports on the “costs and regulatory burdens” of Dodd-Frank.

The Consumer Product Safety Commission would have its funding cut by $3.5 million to $111 million. The bill also includes language prohibiting funding for the new public database established by the office, which would allow consumers to report problems with products. Its existence had been hotly contested by business groups, who contend there is no guarantee the complaints posted are accurate.

The Federal Communications Commission would suffer a funding cut of $17 million, as its budget would fall to $319 million. The measure also prohibits funding for “net neutrality.”

The District of Columbia would see its federal funding shrink by $62 million, to $637 million, under the bill.

The only agency to receive a funding boost would be the Small Business Administration. The measure provides $978 million for it, $249 million more than the previous year’s funding. However, that even comes up short of the president’s request by $7 million.

The bill also includes several legislative provisions, including one that would specifically prohibit funding for “czars” tied to healthcare, climate change, the auto industry, urban affairs or any “substantively similar” positions. It also would prohibit funds for a requirement that entities applying for federal contacts be required to disclose campaign contributions.