Obama Said to Propose CFTC User Fees in $308 Million Budget Plan

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Obama Said to Propose CFTC User Fees in $308 Million Budget Plan

President Barack Obama will propose user fees as an option to help the Commodity Futures Trading Commission carry out derivatives oversight as part of a $308 million budget request for the agency, according to a person with knowledge of the budget plan.

Obama is scheduled to send Congress the third budget of his presidency today, setting the stage for months of political fights with Republicans who have pushed for spending cuts. The White House proposal for fiscal 2012 will come with the budget for the current fiscal year -- including $169 million for the CFTC -- caught in a congressional stalemate.

The user fees would give Congress a set of options for fulfilling the president’s budget request for the agency, said the person, who declined to be identified because the proposal isn’t public. The CFTC is currently funded through congressional spending bills, and user fees would represent an alternative source of funds.

Kenneth Baer, a spokesman for the Office of Management and Budget, declined to comment. Scott Schneider, a spokesman for the CFTC, didn’t return a phone call and an e-mail message seeking comment outside normal business hours.

The Dodd-Frank Act, the financial-regulation law enacted last year, requires the CFTC and the Securities and Exchange Commission to write rules for the derivatives market after largely unregulated trades helped fuel the 2008 credit crisis. CFTC Chairman Gary Gensler told lawmakers at a Feb. 10 hearing that the agency’s budget isn’t big enough to pay for enforcement of the new rules.

Congressional Republicans, who took control of the House and narrowed the Democrats’ majority in the Senate in November elections, proposed cutting the CFTC’s budget by $56.8 million for the rest of current fiscal year as part of a plan to slash federal spending.

To contact the reporter on this story: Silla Brush in Washington at sbrush@bloomberg.net

 

Thanks Lee. They may have pulled it because of ambiguity. It's not clear what derivatives they're talking about. Prolly the OTC that CFTC is going to be responsible for regulating in the future is what they mean.