U.S. Senate Assistant Majority Leader Richard Durbin, D-Illinois, Thursday introduced legislation to increase the authority and resources of the Commodities Futures Trading Commission.

Durbin, Chairman of the Appropriations Subcommittee on Financial Services and General Government, and Senator Tom Harkin, D-Iowa, Chairman of the Committee on Agriculture Nutrition and Forestry, also announced their plans to hold a hearing next week to strengthen the Commodities Futures Trading Commission (CFTC).

The CFTC legislation is co-sponsored by fellow Senate Democrats Majority Leader Harry Reid of Nevada, Energy and Natural Resources Chairman Jeff Bingaman of New Mexico, Byron Dorgan of North Dakota, Diane Feinstein of California and Carl Levin of Michigan.

In a news release, Durbin said, While gas prices climb every day, the understaffed and underfunded CFTC is virtually powerless to stop it. We need to give the agency in charge of investigating and regulating the oil market the resources and authority they need to do their job effectively. At this point, we simply don't know what role speculation or manipulation is playing in price increases...we simply can't waste any more time before getting to the bottom of this.

Over the last seven years commodity market trading has soared from nearly 500 million trades in 2000 to more than 3 billion trades in 2007. However, CTFC staffing levels have dropped 21% from 546 employees in 2000 to 437 last year.

In addition to declining staff levels, despite monumental growth in the market, the agency's budget has not kept pace with the agency's technology needs, according to Durbin. President George W.  Bush has requested a 17% CFTC budget increase which would brings its total budget to only $130 million in fiscal 2009.

Durbin's legislation would authorize new resources for the commission including 100 new employees, as well as provide the technology funding to help the agency update woefully antiquated monitoring and analysis systems. CFTC Chairman Walter Lukken said recently, We could hire 100 people and put them to work tomorrow giving the inflow of trading volume. We are doing the best we can in difficult circumstances.

The bill also aims to improvement transparency in the market. CFTC currently has limited visibility of trades that take place in NYMEX and very little visibility of over-the-counter traders, such as trades from one hedge fund to another, or those that take place in International Commodities Exchange (ICE) in London, according to the news release.

Durbin aims to close the so-called London Loophole: by requiring all traders on oil futures markets to report transactions in a detailed manner to the CTFC.

The bill would also move the CFTC's Inspector General's Office out from under the office of the commission's chairman, giving it clear independence.

It's time to open the books on the oil futures market, Durbin said. We can't expect the CFTC to properly monitor the market...if they don't have the information they need. Congress needs to give the CFTC the authority to monitor these trades closely and the staff and IT system to get the job done.