House members urge action on SEC salaries, fees

House Financial Services Chairman Michael Oxley, R-Ohio, Capital Markets Subcommittee Chairman Richard Baker, R-La., and Rep. Vito Fossella, R-N.Y., are urging Treasury Secretary Robert O'Neill to consider including in the economic stimulus package pending legislation to raise the salaries of Securities and Exchange Commission employees and reduce fees investors pay to the SEC.

It is estimated the legislation would reduce government receipts by $14 billion over 10 years.

The SEC supports the legislation, which would bring the salaries of top-level agency employees up to a level commensurate with those paid to other federal financial regulatory employees. The House overwhelmingly approved the legislation earlier this year but the Senate has yet to act on it.

"The tragic events of Sept. 11 have altered the face of our economy," Fossella said in a statement. "While the Federal Reserve and the [SEC] have coordinated with the industry to keep the money supply fluid and to minimize the negative impact on the equity markets, more needs to be done to ensure our economy does not continue to decline."

House Financial Services ranking member John LaFalce, D-N.Y., who voted against the House bill on the grounds it is a cost-shifting measure that would end up burdening general taxpayers, has strongly reiterated his opposition to the fee-reduction aspect of the measure in the aftermath of the Sept. 11 attacks and because of the weakened economy. However, LaFalce said he believes the current pressures on the securities industry makes an even stronger case for more and experienced agency personnel.

SEC Chairman Harvey Pitt said Wednesday his agency had the tools it needed to restore the financial markets after the recent terrorist attacks, but Congress could take a couple of steps to help the agency do its job, according to National Journal's Technology Daily.

Pitt told the House Financial Services Committee that the SEC needs increased funding both to hire "infinitely more economists of the highest caliber" and to buy technology. As the SEC tracks purchases and sales of securities to determine whether any traders knew of the terrorist attacks before Sept. 11, the agency needs the best resources at its disposal, he said.

Pitt also said Congress could help the agency by giving it the ability to extend emergency rules now in place in the stock markets beyond 10 business days. Those rules, which include an easing of restrictions on when companies and their directors can repurchase their companies' shares, are set to expire Friday.