Washington ? Federal regulators endorsed a Bush administration plan to tighten oversight of the accounting industry Thursday. But the Senate’s Democratic leader called it “a toothless tiger” that won’t reassure investors shaken by Enron’s collapse.

The Securities and Exchange Commission opened to public comment a proposal creating an independent monitoring body to oversee the accounting industry and discipline auditors, replacing the current system in which the industry largely polices itself.

“We’re experiencing a significant loss of investor confidence in public companies, their audited financial statements and the accounting profession,” SEC Chairman Harvey Pitt said at Thursday’s meeting. “Our proposal will help restore investor faith by ensuring strong and effective regulation of the accounting profession.”

Congress has its own proposals for creating a new accounting oversight system.

Seizing on a potential election-year issue, Senate Majority Leader Tom Daschle, D-S.D., assailed the SEC plan.

The plan doesn’t go as far as a bill that advanced Tuesday in the Democratic-controlled Senate, which would restrict accounting firms from doing some lucrative consulting services for companies they audit, to keep them from becoming too cozy.

SEC officials said Thursday the agency would put forward its own auditor independence plan this summer.

Critics have faulted the SEC accounting proposal for allowing the private sector to create the new oversight board, while the Senate bill would have the SEC appoint the board’s members.

The SEC proposal “is a toothless tiger that has no real merit,” Daschle said. “We’ve got to get real, we’ve got to get serious, we’ve got to make sure that we have the confidence of markets, as well as the American people.”

The three SEC commissioners voted to open their proposal to public comment for 60 days.

The SEC is proposing a new oversight board with at least six of its nine members including its chairman and vice chairman to come from outside the accounting industry. The board, which would be overseen by the SEC, would not have subpoena power as the SEC does but could fine auditors or accounting firms or suspend or bar them from practicing.