As I have discussed here on more than one occasion, self-funding of the SEC seems to be an idea that make sense and one whose time has come.

SEC Chairman Mary Schapiro and Commissioner Luis Aguilar have been the most vocal proponents of self-funding over the past year or so, and now that drumbeat is getting louder. Today, Schapiro, five former SEC chairmen, and Sen. Charles Schumer all offered their support for a provision in the Senate's financial reform legislation that would allow the SEC to remove itself from the appropriations process and be self-funded. Notably, however, this provision is not in the House's financial reform bill, which concerns Sen. Schumer and others.

In a statement today, Schapiro emphasized that in her view, the financial crisis was a "stark demonstration of just how important it is to give financial regulators the tools needed to address systemic risk." Self-funding, she believes, "ensures independence, facilitates long-term planning, and closes the resource gap between the agency and the entities we regulate." Other benefits to investors would include the ability to better keep up with the financial industry's rapid growth, and a new level of flexibility by the SEC in reacting to developing risks.

Sen. Schumer added today that even the increased SEC budgets proposed in the House bill ($1.3 billion in 2011, $1.5 billion in 2012, $1.8 billion in 2013, $2 billion in 2014 and $2.3 billion in 2015) do not provide the funds and assurances the SEC needs. "It's nice to have an increased authorization but it doesn't put the dollars and the staff there," Schumer said.

Dwight Smith of Alston & Bird explained that none of this money will "become an actuality until there is an appropriation. That's very different than self-funding, where the SEC can set its own budget and keep the funds."

The five other former chairmen supporting the self-funding provision today were William Donaldson, Harvey Pitt, Arthur Levitt, Richard Breeden, and David Ruder.