Lawmaker offers to broker deal with OMB on SEC pay raises

House Commerce-Justice-State Appropriations Subcommittee Chairman Frank Wolf, R-Va., Wednesday offered to try to broker a deal between the Securities and Exchange Commission and the Office of Management and Budget on the subject of salary increases for SEC professionals who are leaving the agency because of insufficient pay.

At a hearing, Wolf told SEC Chairman Harvey Pitt he could arrange for "you and the OMB to meet with us," on the subject of pay parity--which Pitt called his top budget priority.

Pitt said he welcomed any assistance the committee could provide.

One third of the agency's staff have left in recent years for better paying jobs with other federal regulators, self-regulatory organizations overseen by the SEC, or private sector jobs, Pitt said. "At this critical time for the nation's financial markets, the SEC must be able to keep our most experienced … and talented employees," he added.

While saying he was sympathetic to the Bush administration's desire to avoid deficit spending, Wolf said he "strongly" supports pay parity for SEC professionals. At the same time, however, Wolf also noted that the excitement and fulfillment of public service had to be weighed against the lower pay.

"The SEC is not an agency of boredom or irrelevancy," Wolf said. "My sense is, if you are not there for the dollar, you can make up [for it] in some respects."

Nevertheless, Wolf said he was perplexed that the administration agreed to fund partial SEC pay parity for the remainder of this year, but had failed to budget for the raises in fiscal 2003. Pitt estimates it will cost an additional $76 million to fully fund pay parity for the agency next year.

Pitt emphasized, however, that he understood the need for his agency to try to conform to national priorities. Pitt also said he was "very grateful" for the administration's supplemental fiscal 2002 budget request of $20 million to allow the SEC to immediately hire 100 new professionals to deal with fallout from Enron Corp.'s collapse, including 35 new accountants and lawyers for the agency's enforcement division.

In the long term, however, "My impression is that 100 is not going to prove sufficient," Pitt said.