FOR IMMEDIATE RELEASE
May 25, 2011

CONTACT: John Carey at 202-466-1854
john@ourfinancialsecurity.org

AFR Statement on Mark-up in House Appropriations Subcommittee on Agriculture

Washington, DC – Americans for Financial Reform, a coalition of more than 250 national and state organizations working together for strong Wall Street reform, issued the following statement today:

Yesterday the Agriculture Subcommittee of the House Appropriations committee marked-up a budget that would cut the CFTC’s budget nearly 44% from the President’s FY 2012 budget.

Defunding the CFTC amounts to handing a “keep gambling with our money pass” to the big Wall Street banks. It would sabotage progress made in reining in the casino economy, and allow a handful of firms to continue to speculate in the dark at the public’s expense.

Huge volumes of hidden and un-backed-up derivatives trades were a key cause of the financial crisis. To prevent a repeat of that disaster, and to make markets safer and more transparent the Dodd-Frank Act greatly expanded the responsibilities for the CFTC, giving it oversight of approximately $280 trillion in previously unregulated domestic swaps markets, a more than seven-fold increase in the notional size of the market the CFTC must supervise. It also directed the CFTC to regulate excessive speculation in the commodities markets that is driving up the costs of gas and food, including coffee.

To take on these new responsibilities, the President’s 2012 budget request would increase CFTC funding to $308 million. The President has recommended that much of the increase be funded in a deficit-neutral manner by imposing a very small fee on users of CFTC-regulated derivatives markets. We support this proposal to offset CFTC funding through user fees, but however the CFTC is funded, resources adequate for it to do its job are a tiny cost compared to the cost of allowing the status quo to continue.

With more than 13 million Americans still out of work, more than $8 trillion lost in home values and retirement savings, and millions of foreclosures it could not be clearer that Wall Street must not be allowed to gamble in the shadows. Cutting the CFTC’s budget is not about saving money, it’s about protecting the status quo in the interest of Wall Street special interests.

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