One of the lesser known, but nonetheless hysterical routines that the famed comic duo of Abbott & Costello used to perform was Bud Abbott teaching Lou the intricacies of counting fruit.
The mustachioed Abbott, inarguably one of entertainment's greatest straight men, used to pick up one banana, and then another banana and tell a confused Costello that he was now holding three bananas.
Costello, in an exasperated tone would ask "How could that be three bananas, you've only got two?"
Without missing a beat, Abbott would patiently explain to his dim counterpart that one banana plus two bananas [the two he was now holding] equaled a total of three bananas.
That curious form of mathematics makes as least as much sense to me as some of the areas affected by President Bush's oft-discussed 2006 budget.
And while lawmakers from both sides of the aisle will undoubtedly bicker over programs targeted either for elimination or drastic reductions -- i.e. farm subsidies, Amtrak funding etc. -- one of the areas that interestingly enough remains flat is the budget for Securities and Exchange Commission.
As it now stands, the fiscal 2006 budget for the regulator is slated at $888 million beginning Oct. 1, 2005. Add to that some $25 million that will be carried over from last year, and without the help of Bud Abbott that should total $913 million -- the same as last year.
That figure ends a consecutive year string of funding hikes that have swelled the agency's coffers which stood at $438 million as recently as 2002.
A representative of the financial watchdog was quoted as calling it a "lean budget." That's sort of like saying Bud Abbott's banana math should probably be checked for accuracy.
I find it curious that just a few short years after some of the biggest accounting frauds in this country's history, the regulator is facing some of the same budgetary battles it did back in the late 1990s when it had the temerity to try and implement auditor independence rules.
A furious lobbying effort by several of the then-Big Five firms and the American Institute of CPAs found sympathetic ears in some political circles, who more or less threatened then-SEC chair Arthur Levitt with funding cuts.
The SEC's 2006 budget is also absent any hiring monies.
The previous year, the SEC received money to hire some 106 people -- who will, according to reports, be assigned to monitor the gargantuan mutual fund industry. Contrast that with the 1,000 or so accountants and attorneys the agency has hired since 2002.
Although agencies like the SEC that come under an annual appropriations process are usually the ones squeezed when there's a hint of austerity in the budgetary air, it seems more than a little strange that the way to restore confidence in the capital markets is to hold the line on enforcement funding.
Now let me see if I have this right. One scandal, plus two scandals....
