Senate, House Spending Bills at Odds on SEC Adviser Proposals

The Senate Appropriations Committee advanced a spending bill by unanimous vote Thursday to fund the IRS, SEC, and financial services and government agencies, including specific outlays for SECURE 2.0-mandated regulations.

The Senate bill differs significantly from the spending bill advanced by the House Appropriations Committee on Thursday. That bill is largely the same as the bill that passed the Financial Services and General Government Subcommittee in June.

Among the differences, the House bill completely revokes the approximately $80 billion in additional funding provided to the IRS by the Inflation Reduction Act over the next 10 years, while the Senate bill only cuts $10 billion. The Senate version is consistent with the debt ceiling budget deal reached in late May by President Joe Biden and House Speaker Kevin McCarthy, R-California.

The House bill also blocks several regulatory proposals from the Securities and Exchange Commission. These proposals would include: climate risk and greenhouse gas disclosure; swing pricing for mutual funds; the safeguarding proposal; mandatory auctions for retail orders (the order competition Rule); Regulation Best Execution; and the update to stock price increments. These measures are absent in the Senate version.

The SEC and IRS would also receive cuts from their 2023 levels for fiscal 2024 under the House bill. The SEC’s budget would be cut by $170 million down to $2 billion, and the IRS by $1.1 billion down to $11.25 billion, in each case specifically targeting the enforcement budget. The IRS cuts come in addition to cutting the $80 billion in additional Inflation Reduction Act funding. The Senate bill appropriates $2.4 billion to the SEC.

The Senate version appropriates $1.884 billion to the Department of the Treasury, excluding the IRS, and the House version appropriates $1.793 billion.

The Senate spending bill appropriates $14 million to the Department of Labor so it can construct the “Lost and Found” database of retirement accounts, as mandated by the SECURE 2.0 Act of 2022. This provision is absent from the House version.

The two competing bills also have very different views on telework. Federal teleworking is a frequent complaint among Congressional Republicans and the House bill demands federal agencies to return to pre-pandemic levels of office workers. The Senate bill on the other hand, instructs the SEC, FCC, and FTC to report the impact of telework on recruitment, retention, and performance to Congress.

The two bills will have to be reconciled before being passed in each legislative chamber, then sent to Biden for his signature or veto.