On Air Now

Current Show

Coast to Coast AM   12:00 AM - 5:00 AM

Call Coast to Coast now at 1-800-825-5033

Show Info »

Upcoming Shows

Program Schedule »

Listen

Listen Live Now » 590 AM Kalamazoo, MI

Weather

Current Conditions(Kalamazoo,MI 49001)

More Weather »
71° Feels Like: 71°
Wind: WSW 8 mph Past 24 hrs - Precip: 0”
Current Radar for Zip

Today

PM Thunderstorms 83°

Tonight

Scattered Thunderstorms 66°

Tomorrow

Partly Cloudy 81°

Alerts

Congress funding fight may delay Wall Street reforms

By Andy Sullivan and Roberta Rampton

WASHINGTON (Reuters) - The Obama administration may have to wait several months to implement parts of the landmark Dodd-Frank financial reform law because Congress has yet to approve funds necessary for its implementation.

Requested budget increases for financial regulators were not included in a stopgap spending bill to fund government operations through early December, complicating efforts to put the sweeping law in place. The delay could stretch into 2011.

Congress must pass the temporary spending bill by Friday because it has not passed any of the 12 regular bills that fund government operations for the fiscal year beginning that day. The Senate is expected to vote on the measure Wednesday evening, with a vote in the House of Representatives by Thursday.

The squeeze would be particularly tight for the Commodity Futures Trading Commission and Securities and Exchange Commission, the two agencies which will begin oversight of the $615 trillion over-the-counter derivatives market.

The CFTC had been expecting a 50 to 70 percent boost to its $169 million budget to hire more than 200 new staff and upgrade its outdated technology to take on its new mandate. A funding shortage would also hurt its ability to audit traders and travel for enforcement cases.

"It is simply pathetic how Congress passes all these prescriptive rules and regulations, and then fails to adequately fund the agency on a continuing basis," said former CFTC enforcement chief Greg Mocek, now a partner at McDermott Will & Emery in Washington.

The SEC was also expecting an increase of 18 percent. SEC Chairman Mary Schapiro has said the agency needs to hire 800 new employees over time in order to enforce the new law. In testimony obtained by Reuters, she said: "We will need additional resources, and in particular, additional staff."

REPUBLICANS OPPOSED

Because Congress rarely finishes its spending bills on time, federal agencies routinely must wait weeks or months for money to launch new programs that have already been approved.

Congress is expected to take up the funding bills when it returns after the November 2 elections, but lawmakers could opt for further delay if they do not pass all 12 bills before the temporary funding measure expires on December 3.

Republicans, who overwhelmingly opposed the Dodd-Frank law, are poised for significant gains in the elections and could win control of both chambers of Congress.

That could further complicate the funding fight, as they promise sharp spending cuts and could try to block the requested funding increase to slow the law's implementation.

Democratic Senator Dick Durbin, who heads the subcommittee that sets funding levels for financial regulators, said they should be able to staff up over the next several months even without an increase in their budgets.

"I don't think they are falling behind in terms of hiring people to meet these new responsibilities," Durbin said.

The top Republicans on the banking committees in both the House and the Senate have said they would try to repeal parts of the financial reform law if they won control of Congress.

Republican Senator Richard Shelby, who would chair the Senate Banking Committee, declined to say whether he would oppose an increase in SEC funds to carry out the law.

"We need to see what their plans might be," he told Reuters.

The law aims to prevent a recurrence of the 2007-2009 financial crisis by curbing risky trading by banks and creating a new government watchdog to protect consumers.

The funding fight would not affect several other agencies that will implement the law as they are not dependent on Congress for funding.

The Federal Reserve pays for its operations primarily through investments and fees, while the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency are funded by assessments. The Office of Thrift Supervision, which would be dissolved under Dodd-Frank, also would not be impacted by the funding delay.

(Additional reporting by David Clarke, Christopher Doering and Rachelle Younglai; Editing by Paul Simao)

Comments