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DOL Fiduciary Rule Spared Death in Spending Bill

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The $1.07 trillion spending bill passed late Sunday night does not include a rider to block the Department of Labor from implementing its fiduciary rule.

The bill, which funds the government through September, also freezes funding for the Securities and Exchange Commission at the fiscal 2016 level of $1.605 billion.

While the spending bill omits the DOL fiduciary rule rider, members of the Senate Health, Education, Labor and Pensions Committee told Labor Secretary R. Alexander Acosta on his first day to “conduct and finalize an exhaustive review of the final fiduciary rule before any part of the rule becomes applicable,” pursuant to President Donald Trump’s Feb. 3 executive order.

“Pursuant to the president’s memorandum and in light of the numerous concerns with the final fiduciary rule, we respectfully request that you carry out the president’s directives without delay and finalize a new fiduciary rule review before any part of the rule becomes applicable” on June 9, the senators wrote in their April 28 letter.   

“While the final rule is more workable in some areas than the initial 2015 proposed rule, we remain concerned that the final rule will hurt working and middle-income savers’ access to basic investment education and assistance,” members of the HELP Committee told Acosta. “For example, the final rule harms Individual Retirement Account (IRA) owners by interfering with owners’ access to investment education. The final rule makes illogical distinctions between the same educational services for different types of retirement accounts.”

The funding legislation also does not include four controversial House riders that would have blocked spending by the SEC to issue rules on universal proxy ballots, conflict minerals, pay ratio disclosure and climate change disclosure.

A Senate provision blocking funds for changing SEC protocols for providing paper copies of reports to investors was also dropped.

In addition, the bill includes $1.96 billion in cap adjustment funding, $470 million more than the fiscal year 2016 enacted level, to prevent waste, fraud, abuse and improper payments in the Medicare, Medicaid and Social Security programs.

Senate Appropriations Committee Vice Chairman Patrick Leahy, D-Vermont, stated after the bill was passed that he was “especially glad this agreement does not include a single penny for the construction of a misguided wall along our southern border. A wall the president promised Mexico would pay for, and a wall that would be nothing more than a bumper sticker monstrosity.”

The bipartisan agreement eliminates more than “160 poison pill riders that would have been devastating to the environment, put restrictions on consumer financial protections and attacked the Affordable Care Act,” Leahy said.

New language restricting HHS’ authority to administer or enforce the ACA was not included. The bill provides the Center for Medicare and Medicaid Services (CMS) with funding and program authorities that are consistent with those in fiscal year 2016, thereby protecting its ability to administer Medicare, Medicaid and the ACA. 

The bill also omits a House provisions that would have barred the IRS’ use of funds for Affordable Care Act activities or any Health and Human Services transfers to IRS for ACA purposes.

Also dropped was a House provision that would have undermined the Consumer Financial Protection Bureau by eliminating its direct funding source, restructuring it as a commission, and preventing it from implementing important rules related to forced arbitration, payday lending, high-cost mortgages, and guidance on indirect auto lending.

Another House provision was omitted that would have banned the use of any funds by the Financial Stability Oversight Council to designate nonbanks as “too big to fail” unless the processes for such designation were changed.

As to cybersecurity, the bill provides a total of $971 million for the National Protection and Programs Directorate to protect networks from espionage, data theft and cyberattacks.

 Included within this amount is:

  • $225 million for real-time diagnostics and mitigation;
  • $468 million for intrusion detection on civilian federal networks; and
  • $14.1 million for cybersecurity education to train future cyber personnel.

Federal agencies had more than 77,000 cyber incidents last year, a 10% increase compared with the previous year.

The bill also “prioritizes investments” that will help make college more affordable and put students on the path to higher education and careers, including restoring year-round Pell Grants.

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