Harris Remarks at FY24 Budget Hearing for the Commodity Futures Trading Commission (As Prepared)

Mar 28, 2023

The Subcommittee will come to order.

Thank you all for being here this afternoon. I would like to welcome our witness, Mr. Rostin Behnam, Chairman of the Commodity Futures Trading Commission, to review the fiscal year 2024 CFTC budget request.

The CFTC is requesting $411 million for FY2024, which is an increase of $46 million - or 12.6 percent - over the FY2023 enacted level. The request includes a $12.7 million increase for personnel compensation and benefits, as well as a $30.9 million increase primarily within the Divisions of Data and Administration for IT services, in particular for migration of data from legacy systems to cloud services.

It is important to note that from FY2022 to FY2023, the agency received a $47 million increase in baseline funding and grew from 676 to 759 employees. And this budget is seeking yet another $46 million increase.

The Congressional Budget Office’s most recent outlook shows that this administration has done more to increase our national debt than any other administration. The out of control spending has to stop. There must be an expectation going forward for agencies across the federal government, including the CFTC, to improve efficiencies, root out waste, and focus on core functions without adding to the deficit.

The failure of the Silicon Valley Bank and current unrest in the banking sector highlight the importance of our financial regulators not being asleep at the wheel, nor diverting limited resources and attention toward activities not critical to their core missions.

I am concerned about the CFTC shifting focus to climate, diversity & equity, and other activities outside the bounds of the agency’s fundamental job of ensuring healthy, functioning derivative markets.

The CFTC continues to face new challenges and opportunities each year as evolving technologies and new market participants change the landscape of swaps, futures, and options markets.

Given the rapid expansion of cryptocurrencies and other digital assets, I expect oversight of those markets to be an important topic in today’s hearing.

The fraud and manipulation that occurred at FTX Trading, which cost investors billions of dollars, highlighted the CFTC’s limited oversight authority over cryptocurrencies.

The CFTC has regulatory authority over cryptocurrencies tied to derivative markets and in responding to fraud and manipulation that has already occurred. However, the lack of guardrails on spot markets leaves consumers who invest in these digital assets largely unprotected. The reactionary nature of CFTC’s authority to respond only when wrongdoing has already occurred is often too late to help victims of fraudulent schemes.

As the CFTC faces these new challenges, the agency must not lose focus on its roots that grew out of the agriculture sector. The liquidity, transparency and integrity of derivative markets is critical for farmers and ranchers to hedge risk and ensure accurate price discovery. For example, in my district, poultry producers manage the price risks of feed and other input costs through futures markets.

While the CFTC plays an important role in ensuring the integrity of derivative markets, the American people deserve to know each federal agency is being a responsible steward of their tax dollars.

I look forward to exploring the budget proposal and the CFTC’s work in more depth today. I would also like to remind everyone that we will abide by the five-minute rule for questions. Please make sure to push the “talk” button on your microphone before AND after speaking.

I’d now like to recognize my colleague, Mr. Bishop, for his opening remarks.