President Obama is backing up his tough words for the financial sector with beefed-up budget requests for the government agencies that regulate Wall Street.
The president’s fiscal 2016 budget request includes his highest-ever funding requests for a pair of financial regulators. And he wants to help cover those costs and others in his budget by imposing a new fee on the nation’s largest financial institutions that is also aimed at curbing risky activity.
{mosads}The president’s budget calls for $1.7 billion to fund the Securities and Exchange Commission, and $322 million for the Commodity Futures Trading Commission. Those increases would be boosts of 15 percent and 29 percent, respectively.
Those funding levels are the highest requests yet from Obama — he also requested $1.7 billion for the SEC in fiscal 2015.
The CFTC is currently operating under a $215 million budget, and the agency officials have regularly complained to Congress about their funding limits. The small regulator was handed broad new powers as part of the Dodd-Frank financial reform law, charged with overseeing the multitrillion-dollar derivatives marketplace.
The president has regularly called for higher funding levels for financial regulators in his budgets, but the 2016 plan marks a return to form somewhat. After years of being stymied by GOP lawmakers, Obama actually reduced his request for the CFTC in his fiscal 2015 budget request. After asking for $315 million in fiscal 2014, he stepped down his request for that agency to $280 million in fiscal 2015.
Furthermore, the president calls in his 2016 budget to allow the CFTC to raise its own funds by assessing user fees on the financial industry, like other financial regulators can.
The fate of the Dodd-Frank financial reform law has come back into question following Republican gains in Congress.
Obama caught heat from his fellow Democrats at the end of 2014 when he agreed to swallow some rollbacks to the 2010 law after they were included in a government funding bill by Republicans.
But since then, the president has renewed a tough tone toward the financial sector. In his recent State of the Union address, he vowed to veto any legislation that would unravel new rules on Wall Street.
In his latest budget, the administration helps cover some of the $4 trillion price tag by including a new fee on banks with more than $50 billion in assets. The seven-basis point fee would reap $112 billion over 10 years. The fee would be assessed based on a bank’s liabilities, which the White House argues would also beef up security for the financial system by discouraging banks from making excessive loans and piling up risks.
In addition to higher budgets for some regulators, the administration vowed to fight back against GOP efforts to curb the independent funding of other financial regulators like the Consumer Financial Protection Bureau. Republicans have long pushed to bring that agency’s funding under the control of appropriators, arguing its current structure leaves it unaccountable to Congress.