By Emily Stephenson and Sarah N. Lynch
WASHINGTON (Reuters) – The Republican-led U.S. House of Representatives on Wednesday passed a bill to slash funding for Wall Street oversight and revamp new agencies dedicated to cracking down on fraud against consumers and policing risks after the financial crisis.
The $21.3 billion funding bill, which covers appropriations for the 2015 fiscal year beginning Oct 1 for financial services and other areas of government, passed the House in a 228 to 195 vote along largely partisan lines.
The Democrat-controlled Senate is not expected to approve the bill as it is now.
Earlier this week, the White House said that President Barack Obama “strongly opposes House passage” of the appropriations bill and would veto it if the legislation reached his desk.
House lawmakers have been crafting separate spending bills for various parts of the government, but the Senate has not passed any spending measures.
If the two chambers cannot complete these 12 bills by Sept. 30, they will have to resort to a stop-gap funding plan to keep government agencies running.
In addition to setting funding levels, Wednesday’s legislation contained a raft of other measures.
It would temporarily bar a group of regulators responsible for policing market risks from designating large non-bank companies as “systemically important” – so big that their failure would destabilize markets. Companies given this tag are subjected to tougher scrutiny by U.S. regulators.
“We must prevent government regulators from expanding the doctrine of too-big-to-fail into other parts of our economy,” Representative Scott Garrett, a New Jersey Republican who introduced that language, said in a statement.
It would also force the Consumer Financial Protection Bureau and the Office of Financial Research, which were created by the 2010 Dodd-Frank law, to go through congressional appropriations. They currently get funding from other sources.
CURBING THE SEC
The measure would give the U.S. Securities and Exchange Commission a budget of only $1.4 billion, which is $300 million below the White House’s request. It also bans the SEC from using federal money to adopt rules that would impose a harmonized fiduciary duty on retail brokers and investment advisers.
SEC Chair Mary Jo White said on Wednesday the funding cuts would force her agency to curtail its enforcement and regulatory activity.
“I have deep concerns that the level of funding … will harm America’s investors,” she said in a statement.
In addition, the bill would prevent the government from implementing a slew of rules on everything from derivatives and political spending disclosures to major parts of Obama’s signature healthcare reform law.
The legislation mandates six days of mail delivery by the U.S. Postal Service, which has been looking for ways to cut costs.
The bill would prevent the District of Columbia from using federal funds to pay for abortions and implement rules that decriminalize marijuana use.
It includes a ban on using taxpayer funds to pay for oil paintings of government officials, including the president and members of Congress.
(Reporting by Emily Stephenson and Sarah N. Lynch; Editing by Jan Paschal)
[Image via Agence France-Presse]