Senate panel votes to raise SEC pay

The bill (S. 143), which passed on a voice vote Thursday, would raise the pay scale at the SEC to levels comparable to the Federal Reserve and other financial regulatory agencies.

"We want the best people we can get at the SEC," said Banking Committee Chairman Phil Gramm, R-Texas at a recent news conference. "There's massive competition for people with these skills. You make a sacrifice to be in government service even at these new higher grades, but it doesn't make sense to pay people at the comptroller of the currency a premium to hold on to them and not do the same thing at the SEC." The investor fees were originally levied to pay for the SEC's operations, but the volume of trading has increased to the point that the fees bring in five or six times more money than the agency needs.

Gramm said SEC has a budget just over $400 million, but is expected to take in over $2 billion in fees this year. He also said that an average working person in a retirement program would pay $1,300 in excessive fees in the course of his or her working life. "The first thing we want to do is roll these fees back to the amount needed by the SEC and then set up a structure to guarantee that whenever they're excessive, we lower them; whenever they're inadequate we raise them, and we always have enough funds to fund the Securities and Exchange Commission," Gramm said.