[ by Howard Haykin ] Republican lawmakers are putting the screws on the CFTC with budget negotiations.  The Republican-controlled House released an appropriations bill this week that slashed CFTC's budget by 14%, to $180 million, or $128mn below what President Obama had sought, which would have been an increase.  The allocation is ill-timed, given the fact that the CFTC is current charged with writing dozens of new rules for Wall Street, and enacting new derivatives regulations in cooperation with the SEC. Former Commission Chairwoman Speaks Out. Brooksley Born, the CFTC Chairwoman under President Clinton, threw her support behind a bigger budget at the agency, noting: "The CFTC is a small agency with enormous responsibility."  She added, that the agency "is desperately in need of additional funding." The proposal from the House appropriations committee, while only a preliminary plan, would most likely lead to layoffs.  Barney Frank, co-author of the overhaul law and the lawmaker who hosted Friday's event with Ms. Born, noted that the collapse of MF Global had also drained resources from the agency. 10% Budget Growth. What's more amazing than the political battle that's being waged is the fact that the agency’s budget had grown only 10% since Ms. Born led the agency.  "They want to bring us back to the days of underregulated financial markets and the conditions that led to the Wall Street bailout," said Representative Steny Hoyer of (D-MD), the Democratic House whip.  He added, "Ms. Born is here today to warn us again that, if we erode the SEC and CFTC’S ability to do their jobs, we’ll find ourselves right back where we were in 2008." It's not the first time legislatures have ignored Ms. Born’s warnings.  More than a decade ago, she sounded alarms about increasing threats in the swaps industry, a dark corner of the derivatives industry.  But lawmakers and Treasury officials dismissed her warnings and exempted the now $700 trillion market from oversight. The exemptions paved the way for the AIG and other Wall Street firms to pile into the market, ultimately leading to the need for billions of dollars in bailouts.  "The failure to regulate OTC derivatives has already cost the country so much," Ms. Born said on.  "We must learn from this tragedy to avoid repeating it." [Dealbook, 6/8/11]