Despite the fact that the GOP will control Congress in the new year, industry and political watchers predict ongoing Washington gridlock, and surmise that GOP dominance could be short-lived.
Come 2016, “the Republicans have the problem that the Democrats had in 2014: the vast majority of their [GOP] seats are up in 2016, a presidential year,” said Brian Graff, CEO of the American Society of Pension Professionals and Actuaries, during a recent webcast. There will be a “ton of vulnerable Republicans in blue-leaning states come 2016.”
With GOP control in 2015 comes “huge pressure” on Republicans to show that “they can get things done,” specifically tax reform, and break the gridlock that “Americans are so concerned about,” Graff said. However, just as much as Republicans “want to show that they can govern,” the Democrats and President Barack Obama “will want to block them” from doing so.
The list of regulations and legislation that the advisory industry will be watching — and lobbying to influence — in the new year is long. Advisory trade groups will continue to press for a bipartisan Senate bill to allow the Securities and Exchange Commission to collect user fees to fund advisor exams, while lawmakers have vowed to press ahead on comprehensive tax reform, as well as pension legislation.
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The industry is also anticipating the release of fiduciary rules by the Department of Labor and the SEC. DOL’s redraft is slated for a January release, while, as of press time, SEC Chairwoman Mary Jo White had yet to “clarify” her position on what the agency should do regarding a uniform fiduciary standard for brokers and advisors.
White said in early November that she would provide in the “short term” her position on a fiduciary rule, despite the fact that the agency has not yet decided “whether to do something or what to do” about such a rulemaking.
The SEC’s recently released financial report stated that the agency’s 2015 priorities includes considering — once again — a fiduciary rulemaking, as well as finishing rules mandated by the Dodd-Frank Act.
Sen. Orrin Hatch, R-Utah, incoming chairman of the Senate Finance Committee, said in mid-December that he plans to reintroduce in 2015 his Secure Annuities for Employee Retirement (SAFE) Act, which includes language that would stop the DOL from writing fiduciary rules for individual retirement accounts.
ASPPA’s Graff said to expect a “set of [DOL fiduciary] proposals in early spring next year,” adding that he believes the proposal will be “highly controversial” and that the redraft’s “prohibited transaction exemptions” will fail to address industry concerns with the proposal. Graff sees the controversial proposal eventually landing in Congress, where it will either be “fixed” or “killed.”