Republicans plan to roll back the SEC budget to 2008 levels. By doing so, they will not decrease the deficit one penny, because the SEC is funded exclusively through fees charged to Wall Street. So cutting SEC’s budget saves the Republicans’ bankster buddies a small amount on fees. But despite their claims, that is not their real reason. Their goal is to prevent the SEC from regulating Wall Street.

The new financial regulation law gave the Securities and Exchange Commission a big new job to police hedge funds, derivatives dealers and credit agencies — some of the main culprits in the financial meltdown. It authorized raising the commission’s budget to $2.25 billion, over five years. Now Congress is threatening to deny the S.E.C. the necessary financing to carry out its duties.

What makes this even more absurd is that the S.E.C. doesn’t cost taxpayers a dime. Its budget, like that of other financial regulators, is covered by fees assessed on Wall Street firms. While the other regulators decide their own financing needs, Congress sets the S.E.C.’s budget.

The agency’s budget was due to rise $200 million this year to $1.3 billion, but hasn’t because of the across-the-board freeze in discretionary spending. If House Republicans get their way and roll back spending to 2008 levels, the S.E.C. budget would fall to $906 million.

Mary Schapiro, the chairwoman of the S.E.C., warns that more budget cutting will hamstring its ability to carry out its usual duties of policing increasingly complex securities markets — let alone discharge its new responsibilities. A group of lawyers representing the financial companies regulated by the S.E.C. sent a letter to lawmakers urging them to increase the commission’s budget. Otherwise, they warn, the markets will lose investors’ trust. “The regulator of our capital markets is running almost on empty,” they wrote… [emphasis added]