In a display of supreme confidence in the strength of the American economy, the Federal Deposit Insurance Corporation announced a 2010 budget increase of close to 54% earlier this week. The FDIC’s annual operating budget grew from $2.6 billion in 2009 to $4 billion for 2010. The largest portion of the increase is devoted to funding takeovers of failed banks. The 2009 budget allotted $1.3 billion for this purpose, while the new budget devotes $2.5 billion—nearly twice the amount. Also in the budget is an increased allocation for staffing. The FDIC intends to bring on over 1,600 new employees, most of whom are to be hired on a temporary basis, increasing their total staff by about 24% to 8,653.
And what is the impetus for this greatly increased budget? The press release accompanying the new budget makes it clear that the increase is intended to “ensure that [they] are prepared to handle an even-larger number of bank failures” in 2010. A total of 133 banks have failed so far in 2009, up from just 28 the previous year.
Clearly, the FDIC must not have gotten word that the recovery has begun.