Bill limiting SEC funds to enact Dodd-Frank headed to House floor

A 2013 spending bill that denies the Securities and Exchange Commission nearly $200 million in increased funds it has requested to implement President Obama’s financial reform law is headed to the House floor.

Republicans beat back an attempt to provide the funding during a Wednesday Appropriations Committee markup, defeating Rep. José Serrano’s (D-N.Y.) amendment to add $195 million for the SEC in a party-line vote, 20 to 28.

{mosads}The bill provides added funding for the SEC overall but specifies this can only be used for information technology spending. It also prevents the SEC from spending out of its reserve fund to implement the Dodd-Frank financial reforms.

Serrano said the lack of funding prevents the SEC from being a “strong cop on the beat” and that it invites a repeat of the 2008 U.S. financial crisis.

He called it part of a troubling pattern in the bill of underfunding “the very entities that help our government obtain revenue, protect Americans from abusive practices and ensure a fair playing field for all.”

Spending cardinal Rep. Jo Ann Emerson (R-Mo.) said the SEC needs to reform and make better use of its existing resources.

“The SEC’s problems are not due to lack of funding,” she said. Emerson said the agency has a history of not holding “employees accountable.”

“It is ironic that the agency charged with increasing transparency into financial institutions is so resistant to working with this committee,” Emerson said. 

The bill contains the same amount of funding for the Internal Revenue Service as in 2012. An attempt by Democrats to increase funding for the IRS was also defeated. 

Rep. Norm Dicks (D-Wash.) argued that billions of dollars of tax revenue would be lost because the IRS does not have enough tax enforcement officials. Last year the agency reduced its staff by 5,000 workers.

“Only in Washington can continuing to fund an agency at their current level be described as a devastating cut,” Emerson replied.

Overall, the Financial Services spending bill provides $21.5 billion, a cut of $376 million from 2012 and $2 billion below Obama’s budget request.

The bill is likely to reach the House floor in July but has no chance of being enacted without changes. The Senate bill fully funds the SEC and a compromise is expected in the late fall after fiscal 2013 begins.

The Financial Services bill would also put the Consumer Financial Protection Bureau (CFPB) under the oversight of appropriators by removing its independent funding from the Federal Reserve.