Funding requests by the Commodity Futures Trading Commission and Securities and Exchange Commission, included as part of the White House's proposed budget for Fiscal Year 2014 that was released on Wednesday, would grow both agencies substantially to keep pace with expanding mandates. The extra money is hardly guaranteed though, with Republican critics, including two CFTC commissioners, questioning the need.

The SEC budget request is $1.7 billion, a 27 percent increase over its current budget. It would allow the Commission to hire an additional 676 staff positions.

In its proposal, the SEC says that its “current level of resources is not sufficient to keep pace with the growing size and complexity of the securities markets.” Among the drivers cited for the need to increase funding was that the Commission, in accordance with the Dodd-Frank Act, now has more than 1,400 advisers to hedge funds and other private funds registered with it. The SEC also pointed out that it examined just 8 percent of 11,000 registered advisers in fiscal year 2012 and, with added staff,  hopes to increase that rate as high as 55 percent.

The CFTC would have its budget boosted to nearly $315 million, an increase of roughly 50 percent. Once again, user fees levied on market participants is being pitched to offset the budget increase, even though that effort has failed to overcome opposition in previous years. According to the CFTC's proposed budget, additional funding will help it to “transition from Dodd-Frank ‘start-up' activities to more sustaining activities in 2014.” The Commission is requesting an additional $3 million for information technology services.

Citing its “significantly expanded mission and scope,” CFTC Chairman Gary Gensler said the CFTC's staff has increased a mere 7 percent over the course of 20 years, while the futures market, which the agency has traditionally overseen, has grown five-fold. In addition, the CFTC now directly oversees the swaps market, which is “eight times bigger and far more complex than the futures markets.”

“Simply put, the CFTC is not the right size for the new and expanded mission Congress has directed it to perform,” he said.

Without sufficient funding, Gensler said the CFTC cannot “implement more regular and more in-depth examinations of clearinghouses, trading platforms, and major market intermediaries,” nor can it utilize its "enforcement arm to its fullest potential.”

CFTC Commissioner Bart Chilton, a Democrat, supported the decision to move forward with user fees, even though he has resisted such a move in the past.

“I'm concerned that without such user fees, we won't  have the resources—the people power or the tech tools—needed to take on the oversight and enforcement duties we've been asked to undertake by Congress and the President,” he said. “We simply won't have the bucks to do the job.”

Chilton added that, since the last quarter of 2008, the financial sector has “made more profits than all other sectors.” “So, I'm not too concerned that a transaction fee would be a painful pill—more like a pin prick, really,” he said.

However, Commissioner Scott O'Malia, a Republican, said the funding request was “improbable” and it is not “fiscally prudent to make broad unsubstantiated appeals for massive budget increases without specifically identifying mission needs and priorities.”

The rise in trading volume over the past decade, facilitated by computer-based trading, is not a justification for the “massive staff increase,” he said. Instead it underscores the need to make “automated surveillance the foundation of its oversight and compliance program.”

Commissioner Jill Sommers, also a Republican, said Gensler, testifying before the Senate Committee on Agriculture, Nutrition and Forestry in February, said that due to a lack of resources the Commission is “shelving” enforcement cases. 

“If we are indeed ‘shelving' enforcement cases then we have gravely mismanaged our resources,” she said. “Irrespective of what resources are allocated to us through the appropriation process, we clearly need to shift more resources to enforcement."