As agricultural markets moved wildly over the last year — the same crops (or pork belly, above) were sold time and again — many said part of the problem may have been with oversight from the Commodity Futures Trading Commission. The markets went kaplooey and the move into Congress initially was to combine the CFTC with the Securities and Exchange and to give the new entity more powers. “Many experts have long believed that it makes no sense to have both the CFTC and the Securities and Exchange Commission regulating markets that have become increasingly indistinguishable,” writes L.A. Times reporter Jim Puzzanghera. “They have advocated merging the agencies.”
But, as Puzzanghera writes, the CFTC was under the jurisdiction of the agriculture committees in both the House and Senate. The members of Congress are reluctant to give up the power over these markets — and the contributions that come with regulating some of agriculture’s giant corporations. Combining the CFTC and the SEC threatened to derail the entire reform process, so, for now, it appears the two agencies will remain separate. The Obama administration has backed off on merger plans.
“But even though President Obama had wanted to combine the agencies to close the gaps, the agriculture committees’ power, many believe, was the reason the administration decided against merging them,” Puzzanghera wrote. “I think they correctly judged the politics . . . that it would be a serious impediment to the passage of the overall reform bill to merge the SEC and CFTC,” a Brookings Institution scholar told the L.A. Times writer.