Democrats on Capitol Hill are reportedly soliciting signatures on a letter that says all Republican riders to the omnibus spending bill must be rejected.
Opponents of the Department of Labor’s proposed fiduciary rule have been threatening for months to use the appropriations process to defund the agency’s effort to finalize and enforce a new fiduciary standard.
The omnibus, or appropriations bill, is due for a vote by December 11, or two weeks from Friday.
Congressional leaders will be in negotiations with the White House until then, trying to determine how recent increases in the budget bill will be passed.
A report from Rep. Nita Lowey, D-New York, lists the many areas in which appropriations that made it out of Republican controlled subcommittees in both the House and Senate hope to defund or limit budget initiatives.
This past summer, the Labor, Health and Human Services and Education appropriations subcommittee in the House included direct language against the DOL’s efforts to finalize a fiduciary rule when it allocated $11.7 billion to the DOL, some $1.4 billion below the White House’s request for funding.
“None of the funds made available by this Act may be used to finalize, implement, administer, or enforce the proposed Definition of the Term ‘Fiduciary’,” according to language in the House’s 2016 budget.
Language in the appropriations bill that came out of the Senate was less explicit, recommending a provision that would “restrain regulatory overreach” by the DOL.
Rep. Lowey’s list of Republican riders included the measure to defund Labor’s proposal in the budget released from the Labor, HHS and Education subcommittee.
It was one of about 35 listed efforts by Republicans to defund initiatives, which range in controversy from the Patient Protection and Affordable Care Act and transportation infrastructure and defense spending riders, to more esoteric causes, like the effort to block funding for inspections of horse slaughter facilities, and funding to protect threatened species.
Barbara Roper, director of investment protection at the Consumer Federation of America and a prominent defender of Labor’s fiduciary proposal, told BenefitsPro earlier this year she was concerned about the tactic to defund the fiduciary effort through the appropriations process.
“If someone is really intent on allowing financial service providers to continue to steer investors into high-cost, low-quality products, there certainly are ways to try to do that,” Roper said.
She also noted that President Obama would, of course, have to sign the Omnibus spending bill that includes a rider to defund Labor’s fiduciary proposal.
The President has thrown the weight of his full support behind the DOL's effort, while Republican majority leaders in the House and Senate have been silent on the matter.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
