The many concessions made to stakeholders in the Department of Labor's finalized fiduciary rule are not enough to mollify Republican lawmakers, who this week introduced a joint resolution to block the rule's implementation.
Filed under the Congressional Review Act, which gives Congress 60 days to consider any new regulation issued from the executive branch, the resolution was sponsored by Representatives Phil Roe, R-Tennessee, Charles Boustany, R-Louisiana, and Ann Wagner, R-Missouri in the U.S. House of Representatives. On Thursday of this week, the Committee on Education and the Workforce will vote to advance the resolution.
Senators Johnny Isakson, R-Georgia, Lamar Alexander, R-Tennessee, and Mike Enzi, R-Wyoming, sponsored the resolution on the Senate side.
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The Congressional Review Act was passed in 1996 as a part of House Speaker Newt Gingrich's, R-Georgia, Contract With America as a way to counter executive branch regulatory overreach.
A majority vote in both chambers will be required to move the resolution of disapproval of the DOL's fiduciary rule to President Obama's desk for signature.
In the event of the President's all-but-guaranteed veto, both chambers will have 30 days to override the veto, which will required a two-thirds vote in both chambers.
In the House, that would require 290 votes, presuming all 435 members are voting; there are currently 247 Republicans in the House.
In the Senate, 67 votes will be required to override a presidential veto; there are currently 54 Republicans in the Senate.
The question of timing loomed large in the run up to the DOL's finalization of its fiduciary rule, which will hold all advisors to IRA accounts and advisors to 401(k) plans with less than $50 million in assets to a fiduciary standard of care.
By allowing enough time for the Congressional Review Act's provisions, the Obama Administration assured it would have enough time for the 60-day provision to expire, and leave ample time for a veto before the President's term ends January 21, 2017.
Only one regulation has successfully been overturned under the Congressional Review Act. In 2001, President Bush overturned a holdover OSHA regulation from the Clinton Administration.
In a statement, Sen. Isakson, who chairs the Senate subcommittee on Health, Education, Labor and Pensions, said, "I have worked to fight the implementation of this harmful rule since it was first proposed and promised to do all I could to overturn it before it can harm Georgia families. The introduction of this resolution is the next step in the battle."
Sen. Alexander, who chairs the Senate Committee on Labor, said, "retirement planning is going to be available only to the rich under the Labor Department's so-called fiduciary rule, because many financial advisors won't risk the new legal liability except for clients with big accounts."
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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.
