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Public Statements

Red Tape Reduction and Small Business Job Creation Act

Floor Speech

By:
Date:
Location: Washington, DC

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Ms. WATERS. Madam Chair, my amendment authorizes such appropriations as may be necessary to allow our financial regulators to carry out the activities required under title VI and VII of this legislation. The purpose of the amendment is that if we're having our regulators undertake new and perhaps even duplicative economic analysis functions, we should provide them with the resources to do so.

Madam Chairman, we know that the majority has tried to shortchange our Federal regulators in terms of appropriations, particularly when we contrast their funding with the new responsibility entrusted to them after the financial crisis. Let's consider the SEC, one of the cops on the beat for Wall Street.

This agency is tasked with enforcing our securities laws. They protect investors and make sure firms are held to account when they create toxic financial instruments. The fiscal year 2013 Republican budget proposal calls for funding the SEC at almost $200 million less than what the President has requested and what the Senate Appropriations Committee has provided in their funding bill. This is just another part of an onslaught of cuts to the SEC's budget that Republicans have proposed and that we've been fighting against over the last few years.

The SEC's funding has been erratic. After significant increases in the early half of the decade, the agency was forced to reduce staff. During this period of inconsistent funding, trading volume more than doubled. Since 2003, the number of investment advisers has grown by roughly 50 percent and funds that they manage have increased nearly 55 percent. The SEC's 3,800 employees currently oversee approximately 35,000 entities, including thousands of investment advisers, mutual funds, broker/dealers, and public companies.

With all this responsibility, my colleagues on the other side of the aisle want to spread the commission even thinner with new duplicative cost-benefit requirements that open the agency up to constant litigation, and they want to do this while at the same time refusing to devote additional resources to the agency. The result is that the SEC would be forced to divert resources away from other key functions of the commission, including, perhaps, prosecuting wrongdoers who violate our security laws.

Madam Chair, I reserve the balance of my time.

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Ms. WATERS. Madam Chair, my amendment also addresses title VII of the bill, which relates to the Commodity Futures Trading Commission. The CFTC is the cop on the beat that we tasked to regulate much of the derivatives market under the Wall Street Reform Act. And the CFTC is the agency that cracked down on Barclays when they manipulated a key interest rate benchmark, the Libor, in order to benefit their derivatives trade.

This bill also imposes new cost-benefit requirements on the CFTC. While the requirements on this agency aren't as onerous as the ones imposed on the SEC, I think it is inappropriate to spread the CFTC any thinner when Republicans have proposed to cut the CFTC's funding by 12 percent relative to last year and 40 percent relative to what the Senate provided.

As CFTC Chairman Gary Gensler said last month, the result of proposed House funding cuts ``is to effectively put the interests of Wall Street ahead of those of the American public by significantly underfunding the agency Congress tasked to oversee derivatives--the same complex financial instruments that helped contribute to the most significant economic downturn since the Great Depression.''

Finally, I disagree with the claim that more cost-benefit analyses can solve every regulatory question we face. In fact, I think that these economic analyses often offer a false sense of precision and fail to capture things that aren't easily quantifiable, things like avoiding the next financial crisis and protecting overall market integrity.

I would urge my colleagues to support my amendment, which makes compliance with the new requirements under the underlying bill contingent on them receiving sufficient appropriations to carry out these functions.

I reserve the balance of my time.

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