Rep. Jose E. Serrano Holds a Hearing On the Fiscal Year 2009 Budget for the Securities and Exchange Commission

HOUSE COMMITTEE ON APPROPRIATIONS, SUBCOMMITTEE ON FINANCIAL SERVICES AND GENERAL GOVERNMENT HOLDS A HEARING ON THE FISCAL YEAR 2009 BUDGET FOR THE SECURITIES AND EXCHANGE COMMISSION

APRIL 16, 2008

SPEAKERS: REP. JOSE E. SERRANO, D-N.Y. CHAIRMAN REP. CAROLYN CHEEKS KILPATRICK, D-MICH. REP. C.A. DUTCH RUPPERSBERGER, D-MD. REP. DEBBIE WASSERMAN SCHULTZ, D-FLA. REP. PETER J. VISCLOSKY, D-IND. REP. ROBERT E. "BUD" CRAMER, D-ALA. REP. MAURICE D. HINCHEY, D-N.Y. REP. ADAM B. SCHIFF, D-CALIF. REP. DAVID R. OBEY, D-WIS. EX OFFICIO

REP. RALPH REGULA, R-OHIO RANKING MEMBER REP. MARK STEVEN KIRK, R-ILL. REP. RODNEY ALEXANDER, R-LA. REP. VIRGIL H. GOODE JR., R-VA. REP. JO BONNER, R-ALA. REP. JERRY LEWIS, R-CALIF.

WITNESSES: SECURITIES AND EXCHANGE COMMISSION CHAIRMAN CHRISTOPHER COX

[*] SERRANO: Good morning. The subcommittee will come to order.

But before I do, Mr. Regula, I'd like to ask you a question out in public, because you've been a chairman much longer than I was.

When the pope calls a meeting of cardinals, am I supposed to show up?

(LAUGHTER)

REGULA: Absolutely.

SERRANO: Just checking.

REGULA: I didn't know (inaudible), so he can (inaudible) deal with it.

SERRANO: Get used to me, right?

REGULA: That's right.

SERRANO: I welcome you to this hearing of the Financial Services and General Government Subcommittee.

Today, the subcommittee will hear from the chairman of the Securities and Exchange Commission, the Honorable Christopher Cox. Always nice to see a former colleague with us.

Chairman Cox, welcome to the hearing. We are pleased to have this opportunity to discuss the fiscal year '09 budget with you.

The SEC is responsible for promoting investor protection and education, as well as for overseeing the integrity of capital markets. These responsibilities are essential so that businesses have access to capital, so they can grow, add jobs and contribute to the nation's economic strength.

The commission's budget request for fiscal year '09 is $913 million, which is $7 million above the enacted fiscal year '08 spending, and the authority level for the '08 spending. Part of this funding will be provided through $42 million of prior year balances, resulting in an appropriated level of $871 million. This modest funding increase is allocated toward the '09 federal pay raise, as well as promotions and merit pay increases.

However, this funding increase will not be enough to pay for all of the agency's salary needs at its authorized personnel level. To meet its salary requirements, the commission is proposing to decrease its authorized number of full-time employees down to its actual fiscal year '07 levels.

This troubles me, as recent market trends have raised legitimate questions about the overall integrity of the market. It seems that a reduction in work force at the SEC would send a signal that the government is not committed to the important goals of improving market structure and transparency.

We want to be sure that you have enough people to accomplish your mission. And I will be interested in your comments on the staffing at the commission.

The SEC has been in the news a lot recently, resulting from the Treasury plan for regulatory reform. This plan would dramatically change the structure of the SEC by merging it with the Commodity Futures Trading Commission. The subcommittee looks forward to hearing the commission's response to this plan.

And we welcome you today. And we'll remind you that your statemen...

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