Statecraft
How to Budget for the SEC
Jan 23, 2025
Diego Ruiz, former executive director of the SEC during the 2008 financial crisis, shares invaluable insights from his extensive experience in government affairs. He discusses the SEC's struggle to self-fund and the political dynamics during budget negotiations, emphasizing the pitfalls of resource constraints. Ruiz reflects on the agency's handling of the Bernie Madoff scandal and the challenges of staffing amid crises. He also speculates on the future of agency rulemaking, particularly in light of changing political landscapes.
40:08
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Quick takeaways
- The SEC's reliance on congressional appropriations complicates its financial independence, necessitating a strategic approach to budget negotiations with political forces.
- Supreme Court decisions may lead to more cautious rulemaking by the SEC, as agencies must operate within the confines of explicit congressional authority.
Deep dives
Role and Responsibilities at the SEC
In 2006, the interviewee joined the Securities and Exchange Commission (SEC) as Executive Director, which functioned similarly to a chief operating officer. His responsibilities included managing administrative and operational tasks, as well as overseeing the agency's interactions with Congress regarding its funding. Unlike the Federal Reserve, the SEC does not self-fund its operations and instead must request its budget annually from Congress, which complicates its ability to operate independently. This structure fosters a nuanced relationship with political forces, as the SEC generates revenue through fees and penalties but relies on congressional appropriations for operational funds.
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