06.10.15

U.S. Senator Tammy Baldwin Urges White House to Nominate Middle Class Advocates to SEC

Calls for end to revolving door, attention to harms of short-termism and protection of Dodd-Frank

WASHINGTON, D.C. – U.S. Senator Tammy Baldwin today urged President Obama to nominate individuals who are dedicated to representing the interests of American middle-class families to the Securities and Exchange Commission (SEC). In her letter, Senator Baldwin emphasized that Americans will be best served by Commissioners who have a track record advocating for the public interest and implementing Dodd-Frank regulations that can crack down on Wall Street excess and prevent us from repeating the mistakes of the past. Within the coming months, two vacancies at the SEC will need to be filled by the President.

“As you consider choosing their successors, I write to encourage you to nominate men or women who recognize the threat that short-termism poses to middle-class wages; support the consumer protections and financial regulations enshrined in Dodd-Frank; and, have experience representing the interests of American middle-class families who are falling increasingly behind in the 21st century economy,” wrote Senator Baldwin. “Americans will be best served by Commissioners who have a track record advocating for the public interest and implementing Dodd-Frank regulations that can crack down on Wall Street excess and prevent us from repeating the mistakes of the past.”

Senator Baldwin recently called on the SEC to comment on the effect that short-termism and increasing stock buybacks have on the economy. Stock buybacks allocate revenue to the wealthiest Americans while companies refuse to increase worker pay despite increases in productivity. There is mounting evidence to suggest buybacks have a negative effect on jobs, wages, innovation, competitiveness, and long-term national economic growth. Today’s letter to the White House encourages the nomination of individuals who are willing to ensure SEC rules place long-term public interest and economic security above short-term gains.

"Investors agree with Senator Baldwin that we need SEC Commissioners who are strong public advocates, not people caught in a revolving door to Wall Street," said AFL-CIO Policy Director and Special Counsel Damon Silvers.

“Public Citizen welcomes Sen. Baldwin’s appeal for a public-minded leaders to fill forthcoming vacancies,” said Public Citizen Congress Watch Director Lisa Gilbert. “Wall Street should be policed by regulators free of conflicts of interest with the industry they oversee.”

Full text of the letter:

The President

The White House

1600 Pennsylvania Avenue, N.W.

Washington, DC 20500

Dear Mr. President:

Two vacancies at the Securities and Exchange Commission (SEC) will need to be filled in the coming months as Commissioners Luis Aguilar and Daniel Gallagher leave their posts. As you consider choosing their successors, I write to encourage you to nominate men or women who recognize the threat that short-termism poses to middle-class wages; support the consumer protections and financial regulations enshrined in Dodd-Frank; and, have experience representing the interests of American middle-class families who are falling increasingly behind in the 21st century economy.

As you may know, last year S&P 500 companies spent 95 percent of their profits on stock buybacks and dividends, up from 30 percent in the 1980s.  I recently wrote to the SEC to ask the agency to comment on the effect this phenomenon is having on our economy. Stock buybacks allocate revenue to the wealthiest Americans instead of toward pay increases for employees, investment in infrastructure, or spending on research and development that support long-term economic growth. I encourage you to nominate individuals who are willing to ensure SEC rules place the long-term public interest above short-term gains.

The SEC plays a critical role in implementing Dodd-Frank.  Yet, many SEC rulemakings have been delayed and watered-down, if undertaken at all. Fierce industry opposition is often to blame. The threat of regulatory capture grows with each Wall Street employment contract that includes a bonus for government service. Americans will be best served by Commissioners who have a track record advocating for the public interest and implementing Dodd-Frank regulations that can crack down on Wall Street excess and prevent us from repeating the mistakes of the past.  

In closing, I again ask you to nominate to the SEC individuals who are dedicated to representing the interests of American middle-class families.

Sincerely,

Tammy Baldwin