The best way to ensure that the Department of Labor’s fiduciary rule doesn’t see the light of day may be to amend a government spending bill this fall to do just that, according to Erik Rust, senior legislative assistant for financial services affairs to Rep. Ann Wagner, R-Mo.
Wagner, a House Financial Services Committee member, has introduced H.R. 1090, a bill to stop DOL from issuing its fiduciary rulemaking under ERISA, but Rust said that internal Democratic party politics will make passage of that bill—and any veto override—unlikely. However, should Congress make progress this year in writing and passing a broader spending bill, not a Continuing Resolution (CR), to fund the government, President Obama would be loath to veto the spending bill even if it contained a rider that would stop DOL from issuing its controversial rule.
“We’re operating under a CR right now” through the beginning of December, Rust said, so there’s “no changing of spending or policy priorities.” However, if “you’re passing an appropriations bill, you can attach spending riders to change policy. So at the end of the year, as DOL is close to issuing its rule, we could insert a legislative rider to prevent DOL from issuing the rule” at all, or to get a one-year delay to the rule.
Wagner’s bill, the Retail Investor Protection Act, was passed Sept. 30 by the financial services panel and referred to the full House.
Rust was speaking on a conference call sponsored by Americans for Annuity Protection (AAP), a 501c(4) advocacy group founded this year, according to its website, “by insurance and annuity veterans to ensure a diverse and competitive annuity marketplace serving Americans across the economic spectrum.” The group’s motto is “Annuities protect America; we protect annuities.”
AAP’s CEO, Kim O’Brien, said Wagner was “at the forefront” in protecting consumers from the effects of the DOL rule, which Rust said would “upend” retirement planning for many lower- and middle-income Americans. The rule would “raise prices for retirement planning advice and shut out many Americans” who wish to purchase an annuity to get guaranteed income for life. “This is not a Wall Street issue,” which Democrats have tried to make of the DOL rule, Rust said, rather “this is a Main Street issue affecting every congressman’s district.”
Rust said that for now, it appears that the DOL will issue its final rule in the first quarter of 2016, with eight months for the industry to implement the rule. “They want to get this out the door before a potential Republican president, say a President Trump” will be in office to prevent its implementation. “It will be on the books.”