CFTC seeks to implement new pay scale

Commodity Futures Trading Commission Chairman James Newsome told the Senate Agriculture Committee Wednesday that the CFTC is having a hard time recruiting staff under its current salary schedule. He later told Government Executive he hopes the fiscal 2003 Senate Agriculture appropriations bill will provide money to allow the agency to pay salaries on a level comparable with other federal financial agencies.

The 2002 Farm Security and Rural Investment Act, signed by President Bush on May 13, gave the CFTC the authority to pay its employees the same rates of compensation as those provided in the 1989 Financial Institutions Reform, Recovery and Enforcement Act. The Federal Deposit Insurance Corporation and the Treasury Department's Office of the Comptroller of the Currency already offer higher salaries than the federal average under the law.

In January, Congress gave the Securities and Exchange Commission permission to implement a pay system that would offer parity with the other financial agencies. The SEC adopted a new pay system in May, but is still seeking funding from Congress and the Bush administration to pay for the higher salaries.

Although financial futures dominate the futures industry today, the futures industry started in farm products and metals, and the CFTC still comes under the jurisdictions of Agriculture-related committees in the House and Senate. Newsome did not provide details about why he thinks the Senate Agriculture Committee will provide the money he is seeking. Asked whether the House Agriculture appropriations bill, which was scheduled for markup Thursday, would provide the funds, Newsome said he did not know.

The House Agriculture Appropriations Subcommittee is so stretched for funds it appears unlikely the money would be in the House bill, however. The subcommittee's ranking member, Marcy Kaptur, D-Ohio, has complained bitterly that Subcommittee Chairman Henry Bonilla, R-Texas, did not call the CFTC to appear before the subcommittee this year.

In his prepared testimony before the Senate panel Wednesday, Newsome said the CFTC needs "staff with the proper training and with solid experience in the markets we oversee. All too often, however, we lose people just as they are coming into their own as commodity lawyers, economists and trading specialists. Our turnover rate is more than twice the federal average. In most, if not all, cases, the CFTC's ability to compensate such highly skilled people lags not only far behind that of the private sector, but also well behind that of the other federal financial regulators, where turnover rates are significantly lower. Until recently, we were the only financial regulator still subject to the pay restrictions of Title V [of the U.S. Code]."