The FY 2011 Budget Base and the Continuing Resolution
The President requested $261 million for the CFTC for FY 2011 in order for it to meet both pre-Dodd Frank and Dodd Frank mission and obligations. Of the $261 million $216 million was requested to cover pre-Dodd-Frank authorities. However, Congress has currently continued funding the CFTC at its FY 2010 level of $168.8 million through a Continuing Resolution that will expire on March 4, 2011. The Commission continues to support the President’s FY 2011 request for the agency, as it provided an important step towards ensuring that the CFTC had the staff and resources it needs to fully execute its responsibilities.
However, for the purposes of the FY 2012 budget submission, the Office of Management and Budget (OMB) has directed Federal agencies to include the Continuing Resolution funding level as the FY 2011 base for budget formulation given the uncertainty over what Congress will finally provide in appropriations. Consistent with this direction, the CFTC is using the $168.8 million FY 2010 funding level as the base for the FY 2011 budget.
For context on the impact of these numbers on the CFTC’s budget, it is important to recognize that the Commission reached low point in staffing for the CFTC in FY 2007. The agency had shrunk from a staffing level of 567 FTE in 1999 to 437 FTE in FY 2007—a 23 percent decline in staff while during the same period the futures and options markets increased five-fold. With support from the President and Congress beginning in 2008, the agency was able to begin rebuild its staff, reaching an authorized level of 650 FTE in FY 2010. That 650 FTE level gave the agency a staff that was modestly larger than it had in 1992 when it had the agency had a 592 FTE level and a high of 634 on board, and the markets were a fraction of what they are today.
Under the President’s FY 2011 budget request, growth for the agency was projected to continue up to a level of 864 FTE, the Continuing Resolution will leave the agency near the 650 FTE level.
The Commission has realigned it FY 2011 Budget to conform to the limitations of the FY 2011 Continuing Resolution. All hiring has been restricted. The CFTC hired only two employees since the end of FY 2010 and student employees working part-time were terminated at the end of the 1st quarter of FY 2011. All programs are managing their pre-Dodd-Frank and Dodd Frank responsibilities with current staff which is well below what is required to manage even pre-Dodd-Frank activities. The CFTC is of course complying with the government-wide freeze in cost-of-living-adjustment and some employee benefits programs have been substantially reduced or eliminated outright where legally permitted. The same is true for some advisory and assistance services related to human resources, and operations and logistics, and economic analysis and research. Program travel has been reduced approximately 50 percent. Even though technology is critical the CFTC’s efforts to oversee derivative markets, the Office of Information Technology Service’s (IT) budget has been reduced 36 percent in order to preserve existing staffing levels. The capital non-IT equipment budget and fixed equipment/construction budget has been zeroed out.