President Obama plans to ask Congress to double funding for banking and financial services regulators in a largely symbolic move aimed at keeping a tighter rein on Wall Street and avoiding another serious recession.
In his fiscal 2017 budget that he will release Tuesday, Obama is asking Congress to bolster funding over the next five years for two corporate watchdogs in Washington: the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.
Jeff Zients, White House National Economic Council director, announced the move in a blog post, Monday afternoon. Bloomberg first reported on the post and the budget request.
“The president will continue working to make sure that the financial system works for everything,” Zients said in the post. “As the financial services industry continues to rapidly evolve, some in Congress have used budget limitations to hamper the agencies charged with establishing and enforcing the rules of the road.”
The request for more regulators will likely go nowhere in the GOP-controlled Congress. Republican leaders have said they have no plans to take up major items in Obama’s budget and last week flatly rejected his proposed $10-a-barrel oil tax to pay for the development of clean-energy alternatives.
Obama’s budget also will call for major funding increases for community college initiatives, cancer research and job training for disadvantaged youth.
The president’s 2017 budget would include $1.8 billion for the SEC and $330 million for the CFTC, an increase of 11 percent and 32 percent, respectively. To pay for the increase for the CFTC, the budget proposes instituting user fees on the firms the agency oversees.
It also would level a fee on the some of the largest financial firms based on their liabilities in order to reduce risk, Zients said.
“We learned the hard way in 2008 just how damaging risk and leverage in the financial system can be, and we’ve done a lot to curb excessive risk on Wall Street since,” he said. “This fee is another way to further those reforms, ensuring that taxpayers aren’t on the hook for risky Wall Street gambles.”
