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SEC budget in line of fire as House panel seeks cuts

Republicans on a House financial panel on Tuesday said Wall Street and housing regulators need to learn to do more with less, as Washington tries to tame deficits by cutting back on spending.

The House Financial Services Committee voted to release a 19-page policy document that does not call for specific levels of cuts but singles out agencies, including the Securities and Exchange Commission, for not using resources wisely.

The document was critical of the SEC’s track record, from its failure to quickly catch frauds to past gaffes that led to wasteful spending, including $1 million on unnecessary computer equipment.

It also noted that the SEC’s budget nearly tripled over the past decade.

“Because the resources of the American people are not infinite, government officials must allocate those scarce resources wisely to fewer programs,” said the document, which was drafted by the Republican majority. “The decision to cut spending is not an easy one. But it is necessary.”

Customarily, U.S. House panels do not put forth their views and estimates for the upcoming budget year until after the president submits his recommendations. The views are not binding; however, they carry great weight with congressional appropriators in deciding annual spending levels.

This year, President Barack Obama delayed releasing his budget because Congress is confronting two critical deadlines that could lead to drastic budget cuts, and possibly a partial government shutdown.

The first deadline, March 1, will trigger automatic across-the-board spending cuts of $85 billion known as “sequestration” unless Congress agrees to an alternative.

According to White House Office of Management and Budget estimates, the SEC’s $1.32 billion annual budget could face a $108 million cut if sequestration happens.

The second crucial deadline is March 27 when the temporary spending measure to keep the government running expires. A failure by Congress to reach an accord could lead to a partial government shutdown.

Despite the lack of a presidential budget for fiscal 2014, the Republican-controlled House decided this week to press ahead with the normal course of budget season business, saying they are required to do so by law.

Democrats oppose the move, saying it is premature both without hard numbers from the president and also as the deadline for sequestration looms.