As you know, last week’s passage of a $2.149 billion FY 2024 budget for the SEC represented a “level-funded” budget equal to the agency’s budget for FY 2023. As a result, Chair Gensler is opting to reduce a number of items in the agency’s budget for the remainder of the fiscal year (through September 30). The union is pleased to report that it was able to defend next month’s union-negotiated pay increase from cuts, including both raises and merit pay cash payments, which will not be affected. The reductions will, however, include cuts to important union-negotiated benefits that SEC employees rely upon as critical components of our overall compensation package—special act cash awards, Student Loan Repayment, and the SEC’s contributions for the 3% Supplemental Retirement Match for the final four months of FY 2024 (as detailed in management’s message today).

We all understand that the cause of the FY 2024 shortfall is the decision by a majority in the House of Representatives to play politics with government funding, resulting in a series of threatened government shutdowns culminating in their decision to inadequately fund spending for federal agencies nearly halfway through the fiscal year. However, despite these shenanigans, the proximate cause of the employee benefit cuts at the SEC is a series of budget decisions made by Chair Gensler during FY 2023 and FY 2024. Notwithstanding the veritable barrage of news reports over the past year about the budget fights in Congress, Chair Gensler opted to move forward with increased spending during calendar year 2023 and the first half of FY 2024. The Chair bet that the SEC would receive an increase in its funding for FY 2024—even though astute observers could clearly see that a level budget was a highly probable outcome of the political dysfunction on Capitol Hill. In effect, Chair Gensler wagered with your compensation and benefits, knowing that his staff would suffer the consequences if he lost the bet. Now the bill for that decision has come due.

For more than a year, the union has warned SEC management regarding Chair Gensler’s spending decisions given the political realities that the Commission faced. We also worked behind the scenes, as we always do, with our friends on Capitol Hill to advocate for the SEC’s mission and budget during an extremely difficult budgeting process. In this regard, you should know that NTEU played a critical role in fending off an effort to reduce the SEC’s FY 2024 budget by 1%—a cut that would have had a devastating impact upon our pay raise this year. It is also important for you to know that some other federal agencies were unable to avoid such draconian cuts during the budget process.

Union-negotiated compensation agreements in the federal sector are subject to appropriations, and the union’s deal at the SEC is no different. You should understand, in this context, that protection of the staff’s salary structure and contractual pay raise is always the union’s paramount objective, both during negotiations and in the budgeting process. We view employee pay as the lynchpin of our entire compensation package. Next month’s union-negotiated combined general and merit increase averages 8.1%. This will be the largest compensation increase at the SEC since the Carter administration. We are pleased to report that we were successful in our defense of this important increase. The SEC’s level funding for FY 2024 will have no impact upon that increase, which will proceed as planned, effective on April 7.

That being said, we know that going backwards on benefits at the SEC will not only be keenly felt by the staff, but also will undercut our ability to recruit and retain the highly skilled workforce necessary to meet all the challenges presented by fast-changing financial markets. For that reason, we requested that the Chair make a commitment to investing in our human capital by agreeing to an extension of our 2022 compensation agreement, which ends after the April 7 increase next month. As we told the Chair, doing so would demonstrate his continued support for SEC staff as we move forward. In fact, NTEU is obtaining union contract extensions from the heads of other federal agencies this year. However, despite the fact that our current agreement is expiring, and the strong business case for such an investment in the agency’s employees, Chair Gensler flatly refused even to discuss our future compensation. His refusal even to talk to your representatives speaks volumes about his lack of concern for his own workforce—and the future of the SEC. The Chair has brought on new staff at an historic pace, but we question his continued commitment to ensuring that these new employees are more than mere short-term hires to help the Chair meet his current short-term goals.

As always, thank you to the 80% of SEC frontline staff who are supporting the union’s efforts through their union membership. Under the current circumstances, the strong support of the staff will be critical to the union’s negotiating efforts on compensation for 2025 and beyond. In this regard, stop to consider what would have happened to your pay this year if you were not part of a strong union. It is our unity as a workforce at the SEC that is our greatest strength as we face challenges such as this one. Thanks.