Chairman Wetjen and Commissioner O'Malia Issue Statements Regarding the CFTC Budget (with Lofchie Comment)

CFTC Acting Chairman Mark Wetjen and Commissioner Scott O'Malia issued statements regarding the $215 million budget for the CFTC in the omnibus appropriations bill approved by Congress. Chairman Wetjen stated that he is pleased the House and Senate agreed on the appropriations bill. He stated that the funding is "a step in the right direction," but noted that the CFTC will continue to work with Congress to secure the resources to match new responsibilities.

Commissioner O'Malia expressed his appreciation for the efforts of Congress to provide the CFTC with a "modest increase in Commission spending levels." Further, he explained that it is "quite clear from this funding level that the Commission will need to pick its funding priorities carefully."

Lofchie Comment: Congress loaded so many responsibilities onto the CFTC in Dodd-Frank that the agency would be hard pressed to fulfill them even with a sizeable budget increase. Chairman Wetjen, has the unenviable task of implementing a big statute on a small budget. Under Chairman Gensler, the CFTC did not (i) prioritize, (ii) willingly yield authority or (iii) make any final determination that any transaction or entity was outside the scope of its authority. Accordingly, there is no amount of money allocated to the CFTC that could satisfy the Commission's agenda.

Assuming that there is to be neither a Congressional reconsideration of Dodd-Frank, nor a dramatic increase of the CFTC's budget, the CFTC really must prioritize. This is not a problem that is unique to the CFTC; every regulator or authority has to make choices. One suggestion would be to go more slowly and carefully during the rulemaking process. Last year, the CFTC issued 86 no-action letters, to say nothing of its various exemptive orders. This reflects the fact that the rulemaking process under the former Chairman was driven primarily by the desire for speed rather than the need for care and, thus, the CFTC was forced to spend great amounts of its energy reconsidering rules that supposedly were "finalized." Another suggestion would be to not regulate every transaction or entity that is within the CFTC's possible statutory authority.

See: Chairman Wetjen's Statement; Commissioner O'Malia's Statement.