Bush Seeks More Funding for SEC
President Bush’s new budget seeks a 53% funding increase for the Securities and Exchange Commission next fiscal year so the agency can hire more staff and crack down on corporate fraud.
The SEC is charged with enforcing securities laws to protect investors and maintain honest, open financial markets. The SEC and Congress have said the agency needs more money to cope with a rising caseload after financial scandals at Enron Corp., WorldCom Inc. and other companies.
Bush proposed an $841.5-million SEC budget for the fiscal year beginning Oct. 1, the same as requested by outgoing SEC Chairman Harvey L. Pitt, SEC Executive Director James McConnell said.
“That looks terrific, and it’s critical that Congress give us that kind of number if we are to function with the effectiveness that I hope everyone wants,” SEC Commissioner Harvey Goldschmid said.
The president’s budget foresees boosting the SEC staff to about 3,875 people, an increase of more than 700.
The additional hiring is “clearly in response to the Sarbanes-Oxley legislation and all the requirements that that gives us,” McConnell said.
The legislation called for greater accuracy and accountability for corporations and their executives.
Almost $100 million of the proposed increase would be used to “dramatically improve our filing program so that we will be able to do a much better job of analyzing financial statements,” McConnell said.
Bush’s proposal is $274.5 million more than the $567 million he proposed for this fiscal year and $327.5 million more than the agency received in fiscal 2002.
Congress may adjust Bush’s numbers as it debates the new budget. Whatever happens, the agency probably will get more money than in the past. The Senate proposed a $656-million budget for this year; the House proposed spending $776 million.
Congressional Democrats criticized Bush’s earlier SEC budget proposals, saying he was shortchanging the agency at a time of need.
Precise comparisons with fiscal 2003 spending are difficult because Congress still hasn’t approved a fiscal 2003 budget for the SEC. It is operating under temporary spending authority that for now gives it $548.8 million for the year.
