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Barney Frank: GOP Budget “Bad for Consumers … Investors and the Economy”

Aaron Task
Editor in Chief
Fin - Daily Ticker - US

Last week's budget agreement averted a government shutdown, but there's a major political showdown coming ahead of the new March 18 deadline.

In addition to the battle over Obamacare, entitlement programs and the tax code, there's a big fight brewing over funding for the SEC, Commodity Futures Trading Commission (CFTC) and other financial regulators.

If Republicans get their way "both individual consumers and the financial system will be back at risk," says Rep. Barney Frank (D-Mass.), one of the chief architects of the financial reform legislation passed last year.

"We passed a good bill to deal with derivatives and deal with investor protection and [House Republicans] withheld the funds," he says in the accompanying video. "They weren't doing it to save money, they were doing it because they ideologically believe derivatives should be unregulated."

In addition to the pushback on derivatives legislation, Rep. Frank cited oversight of hedge funds, and funding for the Consumer Financial Protection Bureau as areas where the GOP wants to "re-deregulate the economy." (See: New Consumer Agency Under Attack: "This Is About Cops on the Beat," Warren Says)

"Our efforts to get at the shadow banking system... will be made very difficult by the Republican's budget," Rep. Frank says. "Their view [is] 'let's keep the shadow banking system in the shadows'. It will be bad for consumers, bad for investors [and] ultimately bad for the economy."

Rep. Frank is, of course, a partisan player and a highly controversial figure. But on this issue, at least, he's got the support of The Financial Times, which is not exactly a bastion of radical liberalism.

"The pressure to cut the SEC and CFTC budgets is part of the Republican war on the White House," according to The FT's editorial board. "Dodd-Frank is not perfect, but it improves on what came before. It cannot work, however, if politicians do not support regulators' efforts. If the Republicans want another financial crisis, they are going about it the right way."

Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com