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Obama administration changes begin with search for new SEC chairman

President-elect Barack Obama takes office on Jan. 20, 2009 but the search for a new SEC Chairman has already begun.

Current SEC Chairman Christopher Cox, a former Republican senator, will step down at the end of the Bush administration. John White, director of the SEC's division of corporate finance, also plans to step down.

Cox has been at the center of the current financial crisis and fair value debate and received much criticism for deregulation of the financial markets.

Obama’s transition team has put the nomination for the new secretary for the Department of the Treasury temporarily on hold. There is concern that selecting a candidate too soon might force the president-elect and his advisors to get involved in President Bush’s upcoming economic summit.

The selection of the SEC chairman and the Treasury Secretary can significantly impact the CPA profession which still finds itself among the key parties in the fair value debate. The SEC chairman selection is also of specific interest to CPA firms as they prepare for an inevitable convergence of U.S. GAAP with the International Financial Reporting Standards (IFRS), which is being driven by the SEC and Cox.

The AICPA Congressional & Political Affairs Team is providing an overview of President Obama’s administration. As a senator, Obama supported the CPA profession by co-sponsoring the AICPA's bill to ban tax strategy patents. Obama’s refusal to accept money from lobbyists and his restrictions on their advisory roles in his campaign may indicate that he will lean toward “think tanks” and academia to fill key roles in his administration.

During his campaign, Obama promised change – and tax reform is an area of potentially significant changes. Obama’s tax plan calls for a cut in taxes for the middle class, raising taxes on higher-income individuals and protecting retirement savings.

The GAO has identified 13 urgent issues that require immediate attention during the transition and the first year of the new administration and Congress. While tax reform is not on the list, oversight of financial institutions and markets is ranked number six.

The acting chairman of the Commodity Futures Trading Commission (CFTC), Walter Lukken, called for the government to “scrap” the current regulatory framework, including the SEC, and replace with a new system. Lukken believes the new framework should include three primary authorities: a risk regulator, a market integrity regulator and an investor protection regulator.

The debate over the current financial regulatory system has continued to heat up and the new Congress is expected to consider legislation and possible reform early next year.

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