SEC Expansion Request Gets Positive Response
Securities and Exchange Commission Chairman Harvey Pitt took his case for a bigger SEC budget to Congress on Thursday, and appeared to have a commitment for more money from the Bush administration.
Pitt asked Congress for an additional $15 million to hire 100 more lawyers, accountants and other professionals than President Bush proposed in his budget for fiscal 2003, which begins Oct. 1.
After Pitt’s testimony, a spokeswoman for the Office of Management and Budget said the OMB is “willing to work to provide the SEC with the funding it needs to add additional full-time staff in fiscal 2003.”
Asked if OMB would fund all 100 employees requested by Pitt, spokeswoman Amy Call said, “I’m not sure that the exact figure has been completely worked out,” adding that “we’re talking along the lines of what Chairman Pitt discussed in the hearing this morning.”
The SEC’s budget has emerged as a political issue in the wake of Enron Corp.’s failure and the public outcry over illegal or misleading corporate accounting.
Congressional Democrats and Republicans have urged a bigger SEC budget to handle the Enron case and other accounting investigations.
But Bush proposed spending $467 million for the agency in fiscal 2003, a 6.6% increase over this year and an amount that wouldn’t allow for new staff.
Pitt, who was appointed to the top SEC post by Bush last summer, said the additional 100 staff would increase the commission’s personnel to 3,100 and represented a minimum number needed to meet rising demands on the agency.
“Because of recent events, we need to restore full confidence in our capital markets, and I believe we cannot do that without additional personnel,” Pitt said in testimony before a Senate appropriations subcommittee.
In addition to more staff, Pitt has asked for $76 million more to provide “pay parity” that would increase the salaries of SEC staff to levels now paid to their counterparts in federal banking agencies.
“If there is one message I can leave with you today it is: Please, please fully fund pay parity for the SEC in fiscal 2003,” he told the panel.
The House Financial Services Committee said in a report last week that it intends to support a 50% increase in the SEC budget in 2003.
Pitt’s testimony drew bipartisan backing from the panel. “We certainly want to support you,” said Sen. Judd Gregg of New Hampshire, the top Republican on the subcommittee.
Subcommittee Chairman Ernest Hollings (D-S.C.) “wholeheartedly supports funding for pay parity as well as funding for staff increases at the SEC,” said spokesman Andy Davis.
