Womack Remarks at FY24 Budget Hearing for the U.S. Securities and Exchange Commission (As Prepared)

Mar 29, 2023

The Subcommittee on Financial Services and General Government will come to order. 

Good afternoon, everyone, and Chair Gensler, welcome back to the Subcommittee. My colleagues and I are looking forward to today’s conversation with you.

The nation’s economy remains in a precarious position. The banking sector is in a state of unrest, prices continue to be inflated due to excessive spending, and the country’s debt is on an unsustainable trajectory. Yet, this Administration is proposing a budget that is more of the same.

Unfortunately, the SEC is following suit.  The fiscal year 2024 budget request for the SEC is $265 million above fiscal year 2023 enacted levels which is a double-digit percentage increase. 

Now, some will say, the SEC’s budget is fully offset by transaction fees, but that is only part of the story, and it completely ignores how bloated our government has become. 

Simply put, the sheer size and magnitude of our government is too large, and the SEC’s budget is a prime example of this. 

After years of funding increases, we have an SEC that is heavy-handed with enforcement and examinations, and one that doesn’t think twice about proposing new regulations to completely rethink our markets.

The blistering pace of the SEC rulemaking is a cause for concern.  And this isn’t just coming from Members of Congress. 

The SEC’s own Office of Inspector General in the fall outlined that SEC division offices “raised concerns about increased risks and difficulties managing resources and other mission-related work because of the increase in the SEC’s rulemaking activities.” Again, this was the SEC’s own Office of Inspector General. 

This is critically important especially when the SEC is wading into areas that are not within their expertise and constitutionally questionable, such as requiring public companies to report on greenhouse gas emissions while claiming private enterprises won’t be impacted. 

Unfortunately, these steps taken by the SEC are more examples of their attempt to shift shareholder and board member responsibilities to others that deter from the betterment of these companies.

The trend of diminishing the authority of boards continues to expand outward at the agency and can be truly disruptive. 

Let’s be clear, the SEC’s mission is to protect investors, to ensure fair markets, and to support capital formation.  However, conspicuously absent from all actions taken by the SEC is capital formation. 

Why does this continue to be the case?  Private markets flourish while public markets stagnate.  Examinations, enforcements, and regulations are top of mind for many at the SEC, but serious and practical capital formation conversations seem to be missing.  

The SEC must concentrate on all three tenants of their mission, not some over the other.

Additionally, as I’ve mentioned in past hearings, data security as it pertains to the Consolidated Audit Trail, also known as CAT remains a top concern and I am hopeful that it can be explored thoroughly.

Chair Gensler, I look forward to discussing all of these issues with you today.  With that, I now recognize my colleague and our Ranking Member from Maryland, Mr. Hoyer for his five-minute opening statement.