House Republicans will seek to preserve a provision of the chamber's spending bill that would kill the Labor Department's fiduciary rule as they negotiate a measure to fund the government.
Republican and Democratic House and Senate leaders were scheduled to meet Tuesday afternoon to begin talks on legislation that would keep the government open beyond the current so-called continuing resolution that expires on Jan. 19.
It's not clear whether lawmakers will have to rely on another short-term spending measure or can hammer out a larger bill that would set the government budget through the end of fiscal 2018, which ends on Sept. 30.
A spending bill the
House passed last fall included a so-called rider that would
gut the DOL rule, which requires brokers to act in the best interests of their clients in retirement accounts.
"The provision was in the House-passed version of the bill," Jennifer Hing, spokeswoman for the House Appropriations Committee, wrote in an email. "The House negotiators will fight for this and all House provisions to be maintained."
A rider to kill the DOL rule has come up in the budget process for several years. Each time, it was
snuffed out by Democrats who opposed riders on an array of issues.
DEMOCRATS NEEDED
Republicans, who control the House and Senate, will have to gain the support of at least some Democrats to pass a funding bill. The Democratic caucus in the Senate has 49 members, plenty to sustain a filibuster.
Lisa Gilbert, vice president of legislative affairs at Public Citizen, a consumer advocacy group, is worried that some of the hundreds of riders in the House bill could slip through, if Democrats aren't unified.
A complicating factor is that a lot of big issues, including disaster relief and a program to keep children of undocumented immigrants in the country, are also being negotiated.
"We think it's incredibly important that Democrats push back against poison-pill riders and that they hold the line that an omnibus [spending bill] is what it's intended to be — a spending package," Ms. Gilbert said.
A leader of the Financial Planning Coalition also is keeping an eye on the fate of the fiduciary rider, which reflects the opposition to the DOL rule from Republicans and industry opponents.
"It's been on a wish list for a number of years," said Maureen Thompson, vice president for public policy at the Certified Financial Planner Board of Standards. "It's always a concern, and we will be watching closely."
Another fiduciary advocate is downplaying the chances of the DOL rule rider's survival.
"While there have been some rumors circulating about a fiduciary rule rider, there doesn't appear to be much momentum behind the idea," Stephen W. Hall, legal director and securities specialist at non-profit group Better Markets, said in a statement. "They seem to be little more than stray whispers at this point. It should be noted, however, that should such a rider become a concrete threat, we expect that it will be strenuously opposed."
OPPOSITION EXPECTED
Kate McBride, a founder of the Committee for the Fiduciary Standard, also expects Democrats to stand firm against a fiduciary rider.
"I do expect that they hold together," said Ms. McBride, founder of FiduciaryPath, a fiduciary consulting and auditing firm. "They know exactly what the stakes are for retirement investors. Democrats in the House and Senate do get this."
Parts of the DOL rule were
implemented last June. But its enforcement mechanisms have been
delayed until July 2019, while the DOL reassesses the impact of the regulation on savers and the industry under a directive from President Donald J. Trump.
Advocates for the rule say it mitigates broker conflicts of interest that lead to the sale of inappropriate high-fee investments that erode savings. Opponents say the regulation imposes high costs and legal risks for firms that will make advice more expensive and price out investors with modest assets.
