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President Bush proposed Monday to hike spending for antitrust enforcement, the bankruptcy system and the U.S. Securities and Exchange Commission as part of his overall $1.96 trillion budget. Yet the increases were modest, and some agencies either will be barred from spending all the funds available to them or will have to cut some positions and programs to live within their 2002 budget requests. “This is a very straight-forward baseline budget,” one government official said. The president earmarked $141 million for the Justice Department’s antitrust division, an increase of $20 million over current levels. The bulk of the new funds will be used to fully fund 113 positions that were created to help the division handle the explosion of mergers. The Federal Trade Commission is asking for $157 million, an increase of $9 million from 2001. Spending for the competition bureau would rise $4 million. The money would be used to make permanent 25 positions added this year — including 12 in the competition bureau — and to pay for wage hikes and promotions. William Kovacic, a professor at George Washington University law school, said the budget suggests the administration does not intend to change antitrust policy dramatically. “If you look at this budget, it is an indication that abrupt departures from past practice are unlikely to take place,” Kovacic said. “They also reflect an awareness that the transaction-related work load of the agencies has increased dramatically, and if you didn’t increase the budgets you would be reaching the point where they simply would not be able to devote adequate attention to a lot of deals.” The Bush budget, Kovacic said, contrasts sharply to those submitted during Ronald Reagan’s tenure, when the administration routinely called for cuts in spending for the FTC and antitrust division. The FTC and Justice antitrust division said Hart-Scott-Rodino filing fees will more than cover their budgets. The antitrust division expects not to spend $66 million of the $207 million in HSR fees it estimates receiving, while the FTC will not use $51 million of its $208 million cut of the filing charges. Both amounts are nearly double what the agencies saved from their portion last year of HSR fees. These excess fees are deposited with the Treasury and held for future use by the FTC and antitrust division. They cannot be used for other purposes without congressional authorization. New rules took effect Feb. 1 that seek to exempt about half of all mergers previously subject to HSR from the pre-merger notification requirement. To compensate for the lost revenue, the law imposes higher filing fees on large mergers. If the new system does not generate as much revenue as expected, rather than cut programs the agencies would deposit less money with the Treasury. The president’s budget also calls for spending nearly $50 million more on the federal bankruptcy courts, an increase of 10 percent. Bush, however, does not call for the creation of any new bankruptcy judgeships. Instead, the money would be spent on salaries and operations, including travel. A spokesman for the Administrative Office of the U.S. Courts declined to comment. The U.S. Trustee system would get an extra $20 million. That includes $1 million to hire 12 employees to investigate fraud, $7.3 million to upgrade computerized case filing systems, and $3.7 million to handle an expected increase in workload. The SEC is requesting $437.9 million, an increase of $15.1 million. The budget calls for a net loss of 57 positions, which includes the loss of 13 officials who ensure companies fully disclose data to investors, 12 fraud investigators, and 13 employees who draft market regulations. The agency said it proposed the cuts so it could save $5.2 million. Those funds are needed to pay for higher costs incurred elsewhere in the agency, according to the SEC. The funding crunch at SEC comes despite an agency prediction that it will collect $2.73 billion in corporate fees next year. That is nearly $200 million more than it anticipates receiving this year and more than six times what it spends. Congress, however, uses this excess to fund other programs. The president’s budget will serve as a blueprint for the congressional appropriations committees, which already have started holding hearings on next year’s budget requests. The 2002 fiscal year starts Oct. 1. Copyright (c)2001 TDD, LLC. All rights reserved.

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