Congress cuts S.E.C. budget

“Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself:”

Despite the ever widening scandals, the yawning chasm between NYAG Eliot Spitzer’s effectiveness and that of the underfunded, understaffed, and moraleless S.E.C., our brain trust in Washington has decided to cut funding for enforcement:

“WASHINGTON — House and Senate Republicans, negotiating an $821 billion-plus year-end spending package, have taken a decidedly pro-business slant to help pick up conservative support after Thanksgiving, when the leadership hopes to win final passage . . .

And amid the growing mutual-fund scandal, the Securities and Exchange Commission, which enjoys bipartisan support, will lose a third of the $96 million budget increase it expected until recently. The decision surprised Sen. Paul Sarbanes (D., Md.), who sponsored corporate-reform legislation in the last Congress that committed the body to a steady increase in funds for the SEC. “Once you push back, you lose the momentum,” Mr. Sarbanes said.”

Seriously, how unconscionably clueless do you need to be to think the S.E.C. is overfunded? It’s simply frightening that we are governed by these clueless morons (of both parties).

I am now officially depressed.

Omnibus Spending Plan Packs Business Perks
House and Senate Leaders Seek Conservative Support For $821 Billion Package
By David Rogers
Wall Street Journal, November 24, 2003,,SB106963342827726900,00.html

Alarms Sounded On Cost of GOP Bills
Lawmakers Increase Spending to Win Votes
By Jonathan Weisman
Washington Post Staff Writer, November 24, 2003; Page A01

Mark Twain

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What's been said:

Discussions found on the web:
  1. John Salmon commented on Nov 24

    So the SEC is still getting a $60-some million increase…your headline’s a little deceptive.

  2. Barry Ritholtz commented on Nov 25

    I originally had written “Congress cuts SEC Increase” — but then I discovered 2 things:

    1) the original increase had already been cut back to 90 million from 120m — Some in Congress had wanted to raise the SEC by 150M, but former SEC chair Pitt said it was not necessary — of course, he was an incompetant nincompoop, so I dont know exactly how little to value his opinion — but its somewhere between “extremely” and “very.”

    2) The budget process for large depts like the SEC is done for the coming year ahead by September, typically based upon expected allotment (from their committee chairs in the Senate and Congress) says their budget will be.

    This is a VERY late stage cut, and reduces the expected allocation. In other words, the money was already budgeted by the dept, and the increase was going to go to enforcement.

    Oh, well.

  3. – News and Views commented on Nov 29

    Corporate Scandals? Cut Enforcement Budgets

    The Big Picture caught an underreported story last week– even as tens of billions of corporate perks were dished out…

  4. Barry Ritholtz commented on Nov 30


    We are in agreement on several factual matters; I’m not sure if we see eye to eye on the meaning and/or significance of those facts:

    1) This was a cut of an increase, not an actual decrease (agree);
    2) This was a very late and unexpected budget change — in fact,a reduction of total funding (I think we agree on this);
    3) Less money means less prosecutors, less enforcement, weaker rules, more potential criminality and corruption of the financial markets (I assume we agree);
    4) This act shows how little Congress thinks of SEC enforcement — while they are doling out our tax dollars to all manners of special interest favors and pork projects — spending money like drunken sailors on shore leave — they manage to “save” a few sheckels on ine of the most important law enforcement agencies to the world of capitalism. (do not know if we agree)

    Bottom line: This was a bad thing; It certainly cannot be justified via cost savings, given how spendthrist this group has become.

  5. Glorfindel of Gondolin commented on Nov 30

    SEC budget slashed

    It’s comforting to know that Martha Stewart hasn’t been forgotten. Unfortunately, it’s looking like the Bush Administration (predictably) has no interest in prosecuting corporate crime beyond merely staying out of the way as Martha Stewart is lamb-ifie…

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