OMB accused of 'breaking faith' over SEC pay raise

Senate Banking Committee Chairman Paul Sarbanes, D-Md., Tuesday accused the Office of Management and Budget of "breaking faith" with Congress over a law signed by President Bush last year to bring the salaries of top Securities and Exchange Commission employees in line with those of other federal financial regulators.

OMB Director Mitch Daniels has indicated the SEC has failed to make a case for the raise, and has not budgeted for the increase.

The law also reduces the fees paid by investors to the SEC.

"My own view ... is that OMB has in effect broken the spirit ... of the package," Sarbanes said. "I think, actually, we were just done in on it. It never occurred to me that I should have to make reduction of fees contingent upon giving pay parity, but obviously we should have done that," Sarbanes said at a hearing on an unrelated topic.

"I think it's just breaking faith," Sarbanes added.

SEC Chairman Harvey Pitt, who appeared at a Banking panel hearing Tuesday, said he was in the midst of "encouraging conversations" with OMB to reach "an appropriate resolution" to the discrepancy.