Vital law enforcement and fraud prevention programs would be dangerously reduced under a Senate budget proposal presented yesterday, Robert Pitofsky, Chairman of the Federal Trade Commission, said today.
"The Federal Trade Commission is a law enforcement agency," Pitofsky said. "The business of the FTC is to protect consumers from fraud and enforce laws that maintain a free, vigorously competitive marketplace. Budget cuts of the scale proposed yesterday would, inevitably, slash the FTC's ability to support America's businesses and consumers at a time when the American public faces a greater need for the FTC's work."
A Senate appropriations subcommittee voted yesterday to cut the FTC's budget 20 percent. The FTC, a small, independent commission, is primarily a law enforcement agency responsible for the enforcement of consumer protection and antitrust laws. The Senate proposal would reduce the FTC budget to $79.2 million for fiscal year 1996, which begins October 1, from $98.9 million.
According to Pitofsky, consumers and American business will be the victims of any dramatic budget cuts.
"All you have to do is look at the news of late with mergers at an all-time high and consumer fraud becoming more innovative and pervasive than ever," Pitofsky added. "In the last year the FTC has prosecuted over 100 telemarketing fraud cases alone, preventing potentially hundreds of millions of dollars in consumer losses. Not only are we seeing a record number of mergers, the economic implications of these mergers are profound. In the past year alone over 30 merger enforcement actions have protected consumers from substantial illegal price increases. For example, two recent defense mergers handled by the FTC saved taxpayers at least $50 million. To cripple the FTC's efforts at this time could have tragic implications for taxpayers."
The Senate Appropriations Committee is expected to vote on a bill containing the FTC budget next week.