Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, made the following statement today in response to a letter from Securities and Exchange Commission Chairman Arthur Levitt, who cautioned Congress not to intervene in the SEC's rulemaking on accounting firms and their consulting practices:

"When a government agency makes proposals that will dismember major segments of the American economy, that agency bears the very heavy burden of proof of public benefit. The SEC has not yet met that test.

"The rule proposed by the SEC is too draconian to be implemented in its present form. Similarly, the proposal made by Ernst & Young and PricewaterhouseCoopers – two firms that would be little affected by their own proposal – is unacceptable.

"The concerns that the SEC is attempting to address may justify a new rule but not the rule now being considered. Fortunately, it is possible for Chairman Levitt to work out a compromise that can address his concerns without destroying the world's premier accounting firms. He should take the time and do it right.

"As far as I can determine, none of my colleagues has suggested that Congress get in the business of writing standards for the accounting industry. Members of Congress -- from both sides of the Capitol and both sides of the aisle -- have simply asked that the Securities and Exchange Commission take more time to consider this rule and to reach a compromise that everyone can live with."