Penny Wise & Pound Foolish

Penny Wise and Pound Foolish ST CUTTING WALL" REFORM The House Appropriations Committee has proposed legislation that would cut 12% from the President's budget request for the Securities and Exchange Commission (SEC) and 41% from the request for the Commodity Futures Trading Commission (CFTC) for Fiscal Year 2013. That is a combined reduction of $323 million. These cuts would undermine the enforcement of Wall Street reform. WHAT THE SEC AND CFTC DO The SEC and the CFTC are oversight agencies that help keep financial markets competitive and secure. The SEC The CFTC The SEC protects The CFTC oversees more than 90 million investors who the U.S. derivatives own mutual funds and helps regulate the more-than-$50 trillion U.S. market market, which includes $300 trillion in swaps and $40 trillion in futures. in stocks and bonds. THE CUTS IN CONTEXT The House 12% 41% proposed proposed, is proposing to cut $195 million from the cut cut CFTC FY2013 REQUEST $308m ..and another $128 million from the President's SEC budget request... President's CFTC SEC FY2013 REQUEST $1.6b budget request. = 100 full-time equivalent employees in 2013 ABOUT 700 CFTC EMPLOYEES LESS THAN THE PRESIDENT REQUESTED These proposed cuts are equivalent to the funding of about 1,600 workers"at the agencies. ABOUT 900 SEC EMPLOYEES LESS THAN THE PRESIDENT REQUESTED This is in spite of the fact that the SEC pays for itself, largely through fees on trading volumes. SEC FY2013 PROJECTED RECEIPTS FROM FEES $1.6b Moreover, these cuts are less than .002% of the total household wealth lost during the financial crisis. Proposed cuts $323 million Household wealth lost, 2007 - 2009° $19 trillion NOTES and SOURCES (a) Notional amount outstanding. (b) Based on average salary and benefits for the SEC and CFTC requested for 2013. (c) Difference in household net worth from peak (2007 Q2) to trough (2009 Q1). Inflation-adjusted 2011 dollars. President's Fiscal Year 2013 Budget, http://go.usa.gov/vqT House Appropriations Committee Fiscal Year 2013 Reported Bills, http://go.usa.gov/vqD and http://go.usa.gov/vqk CFTC Fiscal Year 2013 Budget and Performance Plan, http://go.usa.gov/vZd SEC Fiscal Year 2013 Congressional Justification In Brief, http://go.usa.gov/vZv Investment Company Institute 2012 Fact Book, http://goo.gl/GVN6H SIFMA U.S. Bond Market data, http://goo.gl/xoLum World Bank stock market capitalization data, http://goo.gl/VJWXX Federal Reserve Flow of Funds, Table B.100 U.S. Department of the Treasury July 2012 Q'B«8«B« Q'B«B«B« Q'B«8«B«r