While the House Appropriations Committee is doing its best to promote legislation that will freeze the SEC's FY 2012 budget at its current level of $1.185 billion (and thereby reject the SEC's FY 2012 budget request of $1.407 billion), Senate Democrats are pushing back.

Yesterday, Senate Democrats Jack Reed, Charles E. Schumer, Richard Durbin and Robert Menendez shot off a letter to Harold Rogers, Chairman of the House Appropriations Committee, urging the House to "fully fund the Securities and Exchange Commission (SEC) at a level that will allow it to carry out its core mission and fully implement its expanded responsibilities" under Dodd-Frank.

The four senators wrote that with the economy still recovering from the worst financial crisis in 80 years, this was "hardly the time to handcuff the primary cop on the beat in our financial markets." They also noted that fully funding the SEC would not impact the budget, as the SEC is completely funded by fees it collects from the industry.

In a separate statement, Sen. Menendez said that the House's proposed "cuts" could "pave the way for the next Bernie Madoff." While Republicans have pointed to the SEC's failings in the Madoff case as support for trimming the SEC budget, Sen. Menendez concluded otherwise. He said that in the Madoff case, the "lack of experience and expertise of the SEC personnel assigned to investigate Madoff" led to Madoff's scheme going undetected. A higher budget would allow the agency to retain experienced personnel and experts, he stated.

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