Frank says cuts would hamper oversight
WASHINGTON — Representative Barney Frank lashed out yesterday at Republican efforts to cut federal spending to 2008 levels, saying the move would cripple regulators’ ability to oversee financial markets and implement the overhaul of financial regulations passed last year.
Frank warned even level funding is not an option because the Securities and Exchange Commission and Commodity Futures Trading Commission need additional funding to hire hundreds of employees to issue and enforce regulations under the new law, which he helped write.
The regulatory overhaul was in response to the economic collapse of the fall of 2008, when unregulated derivative trading and opaque accounting practices accelerated a shakeout of the mortgage finance industry.
Representative Scott Garrett of New Jersey, a Republican and chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, responded in a statement that “a dramatic spending increase to fund the SEC and CFTC, as envisioned by the authors of the Dodd-Frank legislation, would further the mindset that our nation’s problems can be solved with more spending, not more efficiency.
“During our country’s current debt crisis, all branches of government — including Congress — have to tighten their belts and find ways to make their money go further,’’ said Garrett, who also chairs the budget task force of House conservative caucus Republican Study Committee.
Frank said the amount of money needed to fund the overhaul is miniscule compared to the federal budget. And he pointed to a caveat in the GOP’s proposal to roll back spending levels — the plan would exempt security and defense spending.
“We’re arguing the security of the average American was far more endangered by the financial crisis than by a lot of other things that our military does,’’ Frank said.
Frank, the ranking minority member on the Financial Services Committee, criticized Garrett’s position. “The budgets he wants them to operate within are budgets which predate financial regulation, predate regulation of derivatives, and predate investor protection,’’ he said.
Donovan Slack can be reached at firstname.lastname@example.org.