In the US, Paul Atkins will soon testify before the Senate Banking Committee for his potential Securities and Exchange Commission (SEC) chair nomination, with no set date. In addition to facing questions on his regulatory philosophy, enforcement priorities, and the SEC’s mandate to protect investors, ensure fair markets, and support capital formation, Atkins will face more specific inquiries, including the SEC’s unbalanced funding model and the impact of DOGE on its budget, writes Jim Toes, president and CEO of the Security Traders Association.
The Department of Government Efficiency (DOGE), established by US president Donald Trump via executive order in January 2025, is temporary government organization led by Elon Musk aimed at cutting federal spending and boosting government efficiency. Unlike a permanent agency, DOGE operates outside traditional bureaucratic structures, tasked with identifying waste, fraud, and abuse across federal departments. Its mission centers on reducing the $6.7 trillion federal budget—initially targeting $2 trillion in cuts.
Since its inception, DOGE has consumed the headlines every day with actions that include terminating federal contracts, grants, jobs and even the U.S. penny production. Now it is turning its attention to the Securities and Exchange Commission and its $2.4 billion budget. DOGE’s impact on the SEC could be significant.
Critics argue that significant cuts could leave investors vulnerable to misconduct by bad actors. Meanwhile, supporters view any reductions as necessary to rein in a regulator they perceive as overly zealous in shaping government policy rather than fulfilling its congressional mandate.
While the SEC’s budget size remains undecided, both sides should agree on a more pressing issue: the SEC’s funding model is flawed and a single market participant — the equity markets — continues to shoulder the full cost of a regulator overseeing multiple asset classes. If left unchanged, it could create significant problems for US equity markets.
“DOGE may or may not lead to significant cuts in the SEC’s budget, but its true value for investors and taxpayers would lie in sparking a fairer, more efficient and balanced funding model — one that places the cost of regulation on the assets being regulated. Ultimately, Congress bears the responsibility of designing a balanced funding model, as it did in 2002. However, it cannot begin drafting legislation without a clear understanding of the SEC’s priorities for the foreseeable future,” writes Toes.