- GOP proposes $2.03B SEC budget for FY26, cutting $154M from 2025
- Bill blocks funds for enforcing rapid cyberattack disclosure rules
- Democrats warn cuts weaken consumer protections and regulatory powers
The Republican majority in the House introduced a proposal to cut the fiscal year 2026 budget of the Securities and Exchange Commission (SEC) by 7 percent, providing the agency with only more than 2.03 billion, or 153.9 million less than in 2025.
In addition to the cuts, the offer would prevent the use of funds on implementing a rule by the Securities and Exchange Commission that would require public companies to report cyberattacks within four days, except when that could jeopardize national security or public safety. The rule also requires companies to disclose cyber risk management plans annually, a factor that GOP lawmakers cite as being used by ransomware criminals and which several banking groups have called to have it repealed.
GOP Waves Fiscal Responsibility and National Security on Spending Plan
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According to Dave Joyce, chairman of the House Appropriations financial services subcommittee, the proposed budget will provide fiscal responsibility, will take advantage of technology, and beef up national security by emphasizing cutting wasteful spending in federal agencies.
The party-line funding plan – which includes the SEC, Treasury, and other agencies – was brought up by the subcommittee markup prior to passage by the full committee. The draft also prohibits using SEC money to gather personally identifiable information through trade reporting systems and prohibits rulemaking on the sale of privately-issued securities, which Democrats have strongly criticized as allowing corporate malfeasance.
SEC Budget Battles Reflect Broader Political Divide
This budgeting tactic of the Congress may be largely regarded as a part of Republican attempts to undo the regulatory actions taken under the presidency of Joe Biden, particularly those related to crypto and cybersecurity. The SEC had proposed $2.149 billion to cover the personnel budget supporting 4,101 employees in FY2026, and the difference between agency demands and Republican budget goals is clear.
Democratic legislators termed the cuts as a loss to investor protections and consumers, accusing the Republicans of taking up the side of corporations as opposed to the side of average Americans. The ranking member, Rosa DeLauro, cautioned that the bill would allow greedy corporations to avoid paying taxes and less regulation on exploiting consumers.
The current fight over SEC funding underscores the petty politics of the extent and authority of financial regulators in a changing marketplace risk environment and a digital threat. The outcome of the last round of budgetary negotiations will determine the ability of the SEC to provide regulation on cybersecurity, transparency of securities trading, and regulation of the private market.
