Thursday, June 21, 2012

Obama Administration Issues Veto Message for House Legislation Cutting CFTC Funding for FY 2013

The Obama Administration has issued a veto message on HR 5973, making appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies programs for the FY 2013. HR 5973 would cut funding for the CFTC and, in the Administration’s view, would severely undermine key investments in financial oversight in a manner that would cripple Wall Street reform.

The Administration strongly opposes the $128 million reduction in funding from the FY 2013 budget request for the CFTC. Moreover, the $25 million cut from the FY 2012 enacted level would result in furloughs across the Agency, and would also severely undermine the CFTC's ability to carry out its market oversight and enforcement functions. More broadly, the funding level would significantly curtail the Administration's priority of timely, effective implementation of Wall Street Reform, which includes the CFTC's new responsibilities to regulate the $300 trillion swaps market.

Reducing the CFTC's capacity to effectively police the futures and swaps marketplaces would imperil investors' funds and pose a threat to U.S. financial stability. In addition, the Administration urged Congress to consider the Budget proposal to implement a CFTC user fee, which would fully offset the FY 2013 Budget request for the Commission. The CFTC is the only Federal financial regulator not funded in whole or in part through fees paid by its regulated community.