AFR Statement on Markup of FY 2012 Agriculture Budget

May 31, 2011

CONTACT: John Carey at 202-466-1854

AFR Statement on Markup of FY 2012 Agriculture Budget

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:

Today the House Appropriations committee marked up a budget that would cut the CFTC’s budget nearly 44% from the President’s FY 2012 budget.

This budget cut amounts to handing a pass to the big Wall Street banks to keep gambling with our money. Defunding the CFTC would make it impossible to implement key elements of the financial regulatory reforms passed in the Dodd-Frank Act, including oversight of previously unregulated derivatives markets and new restrictions on commodity speculation.

The Financial Crisis Inquiry Commission concluded that unregulated “shadow markets” in derivatives 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 This represents 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.

To take on these new responsibilities, the President’s 2012 budget request would increase CFTC funding to $308 million, a $105 million increase over recently approved 2011 funding levels. 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 funding is obtained, the small amount of extra resources necessary for the CFTC to do its job are miniscule compared to the risk of another financial crisis.

With more than 13 million Americans still out of work, trillions of dollars 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.