Thursday, January 9, 2003

Jesse Jacobs - 202-224-4524


As final negotiations begin over FY 2003 spending levels for agencies within the Federal government, Senators Paul Sarbanes (D-MD), Carl Levin (D-MI), Chris Dodd (D-CT), and Jon Corzine (D-NJ), are urging the members of the Senate Appropriations Committee to maintain the $750 million for the Securities and Exchange Commission (SEC). With reduced funding caps being imposed by the Bush Administration and incoming Republican leadership, the Senators, who were intimately involved in addressing the corporate accountability crisis that has plagued companies and investors during the past two years, are deeply concerned that the SEC may not receive the resources necessary to ensure that the U.S. capital markets remain the strongest in, and the envy of, the world.

In letters to incoming Senate Appropriations Committee Chair Ted Stevens (R-AK) and Ranking Member Robert Byrd (D-WV), the four Democratic Senators are urging the Committee to “provide the SEC with the resources it urgently needs to carry out its responsibilities for assuring the integrity of the capital markets and protecting investors. A revitalized and adequately funded SEC is crucial to restoring investor confidence in our markets.”

By all accounts, the SEC is seriously underfunded. The escalating growth in its responsibilities has far outstripped any increase in budget resources, so that the SEC is seriously understaffed, must rely on outdated and inefficient technology, and lacks the resources necessary to offer salaries competitive with those at other federal regulatory agencies. As a result, the SEC continues to face serious difficulties in building and retaining the staff it must have of highly competent accountants, lawyers and other financial experts. The recent accounting deceptions and corporate abuses require significant enforcement funds,” the Senators continued.

The Senate Appropriations Committee, under Democratic control, earlier approved a $750 million allocation for the agency, which was a substantial increase over the appropriated FY 2002 level of $459 million. The recently enacted Sarbanes-Oxley Act, which President Bush signed into law in July, called for an appropriation of $776 million for FY 2003.

Vigorous transparent capital markets are indispensable to a healthy economy, and the SEC plays a central role in assuring their integrity. As the SEC continues to deal with the consequences of the long, sobering period of financial reporting crises, and at the same time moves to implement the Sarbanes-Oxley Act, we hope very much that you will recommend the $750 million appropriation approved by your Committee in the 107th Congress,” the Senators concluded.