WASHINGTON — Budget cuts proposed by Republicans would foster uncertainty in the derivatives market but would not interfere with new rulemaking, the Commodity Futures Trading Commission’s chairman warned members of a Senate panel Wednesday.

During a hearing before the Senate Agriculture Committee about the one-year anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, CFTC chairman Gary Gensler said a proposal to slice his agency’s budget by 15% for fiscal year 2012 would have the immediate effect of forcing the commission to cut staff, making officials less available to field questions from market participants about the new regulatory scheme.

“It would be bad for the American public,” Gensler said. “There will be more market uncertainty in 2012 than necessary.”

Gensler also said budget cutbacks would not hamstring the CFTC’s Dodd-Frank implementation efforts.

“We will get these rules done,” he told the lawmakers.

Gensler’s comments came one day after the CFTC voted unanimously to grant temporary relief from Dodd-Frank provisions that would have required the agency to have certain rules in place by July 16, within 360 days of the statute’s enactment. The measure would provide a hiatus designed to address gaps in the CFTC’s rulemaking.

Specifically, it would apply to swaps rules that refer to as-yet-undefined terms in the commission’s regulatory framework, including “swap,” “swap dealer,” and “major swap participant.”

For such rules, including the CFTC’s proposed business-conduct standards for swap dealers, the proposal would provide regulated persons and entities a temporary exemption, lasting until as late as the end of December.

Dodd-Frank gave the CFTC rulemaking authority to impose business conduct requirements on swap dealers in their dealings with counterparties, including “special entities,” such as state and local governments and public sector retirement plans.

During the one-hour hearing Wednesday, Sen. Pat Roberts, R-Kan., quizzed Gensler about the CFTC’s rulemaking delay, asking whether it makes sense to place market participants into what could be a six-month purgatory.

Gensler said the commission is engaged in a balancing act, trying to protect the American public, get the rules right, and neither over-read nor under-read its Dodd-Frank mandate.

“We want to do what Congress intended us to do,” he said.

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