Securities and Exchange Commission Historical Society

Regulating the Regulators: The Executive Branch and the SEC, 1981-2008

An Independent Agency

Budget Challenges

"People in the agency had a hard time understanding. We’re an independent agency, but no, we weren’t independent from a budget standpoint. We were part of the President’s budget, and we were competing for resources all the time."

- June 24, 2015 Interview with James McConnell

The SEC regularly dealt with budget challenges, in part to the wish of the predominantly Republican Administrations to reduce the size of government.  But in the case of the SEC, cutting the budget meant cutting staff.  Richard Breeden remembered, “One element of the Reagan Administration was severe budget issues during those times; agencies didn’t just get no increase, they actually had rollbacks.  The Commission as I recall had about a 25% cut in its budget.  When you cut the Commission’s budget, you’re cutting people.”10

SEC Chairmen were expected to support the President’s budget.  John Shad “had to say that the SEC can do well in this budget. Reagan was making huge cuts everywhere, so the SEC was going to take its cut.” Shad’s fellow Commissioners protested the cuts, to Shad’s dismay.  “I remember writing articles that said, 'There’s a lot of fat in the government and in the independent regulatory agencies but not at the SEC.  This is a really important regulatory agency, and if you cut staff, you’ll cut our effectiveness.'  [Shad] didn’t like that.  He wasn’t about to offend the Reaganites.”11

Some Chairmen were able to secure budget increases.  Richard Breeden, with his previous White House service, could make the case to President George H.W. Bush for more funding.  William Donaldson was able to secure extra resources from the George W. Bush Administration.  One budget success for the SEC was the establishment in 2002 of pay parity for staff.  Commission leaders had worked since the 1980s to provide more realistic SEC salary levels, in light of disparities between SEC salaries and the salaries of other financial regulatory agencies, as well as between the SEC and the private sector.12

The goal of an independent budget for the SEC was less probable. “Asking for an independent funding stream would have been something that would have required coordination with the White House.  That was probably not something that was likely to get a favorable reception.”  Like other agencies, the SEC budget was tied to how effectively it used the resources it received; as James McConnell noted, “That’s a common thing in Washington.  If you don’t do better, you’re going to lose your budget.”13


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Related Museum Resources

Papers

March 20, 1980
image pdf (Courtesy of David Morf)
April 6, 1981
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
October 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
October 14, 1981
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
October 27, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
October 27, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
October 28, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 2, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 4, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 4, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 9, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 20, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 23, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
December 4, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
September 28, 1983
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
September 28, 1983
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
September 28, 1983
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
September 28, 1983
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
September 28, 1983
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
September 28, 1983
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
September 28, 1983
transcript pdf (Courtesy of George Bush Presidential Library and Museum)
March 21, 1985
image pdf (Courtesy of David B.H. Martin)
May 13, 1987
image pdf (Courtesy of National Archives and Records Administration)
December 11, 1987
image pdf (Courtesy of National Archives and Records Administration)
April 13, 1988
image pdf (Courtesy of David S. Ruder)
August 19, 1988
image pdf (Courtesy of David S. Ruder)
January 17, 1989
image pdf (Courtesy of David S. Ruder)
April 6, 1989
image pdf (Courtesy of David S. Ruder)
April 18, 1989
image pdf (Courtesy of David S. Ruder)
February 1995
image pdf (Anonymous)
June 28, 2001
image pdf (Courtesy of Kathryn McGrath)
April 17, 2002
image pdf (Courtesy of Kathryn McGrath)

Oral Histories

27 July 2012

Jonathan Burks

13 November 2005

Barbara Thomas Judge

24 June 2015

James McConnell

Programs

02 June 2016

At the Crossroads of the White House and the SEC (Seventeenth Annual Meeting)

Moderator: Kurt Hohenstein

Presenter(s): Richard Breeden

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