While the resolution to block the Department of Labor’s fiduciary rule will likely make it to President Barack Obama’s desk, Rep. Phil Roe, R-Tenn., conceded Tuesday afternoon that the president will veto it and the industry “will be stuck” with DOL’s rule.
At an event held on Capitol Hill by the U.S Chamber of Commerce, Roe, chairman of the Subcommittee on Health, Employment, Labor and Pensions, said that following the House Rules Committee meeting Wednesday afternoon, the rule for the resolution, HJ Res. 88 – which passed the House Education and the Workforce Committee on April 21 – will be considered on the House floor Thursday.
The House is expected to debate and vote on the resolution Friday morning.
The Obama administration quickly responded the day after the Hill briefing that Obama would indeed veto the resolution and that the administration “strongly opposes H.J.Res. 88 because the bill would overturn an important Department of Labor final rule critical to protecting Americans’ hard-earned savings and preserving their retirement security.”
The Office of Management and Budget said that “outdated regulations in place before this rulemaking did not ensure that financial advisers act in their clients’ best interest when giving retirement investment advice. Instead, some firms have incentivized advisers to steer clients into products that have higher fees and lower returns — costing American families an estimated $17 billion a year.”
Despite the inevitable veto of such legislation – the Senate has also introduced a similar resolution – Roe, along with Rep. Peter Roskam, R-Ill., a member of the House Ways and Means Committee, vowed at the Hill briefing to continue to fight DOL’s rule, arguing that the rule will have long-term consequences that will devastate retirement savers.
“We’ve got to be clear minded and understand this is a fight worth having. It’s not an overcharacterization to say that this [DOL fiduciary rule] is Obamacare, essentially, on the retirement system,” Roskam said. “It’s an aggressive characterization, but it’s not an overcharacterization.”
Roskam noted that he is “disappointed” with the final rule, adding that while DOL “made some things different, I don’t think substantively it’s that different in terms of how it’s going to be implemented.”
OMB stated Wednesday, however, that the final DOL rule “reflects extensive feedback from industry, advocates, and members of Congress, and has been streamlined to reduce the compliance burden and ensure continued access to advice, while maintaining an enforceable best-interest standard that protects consumers. It is essential that these critical protections go into effect.”
Roskam argued at the briefing that the “long-term impact of the rule is, unfortunately, that people at the lower end of the food chain are going to get less advice.”