Amidst the many controversies brewing in Washington
Russia-gate, the fight over heath care reform in the U.S. House
of Representatives, the skirmishes surrounding Judge Neil
Gorsuchs nomination to the U.S. Supreme Court, to name a
few it can be easy to overlook the fact that business is
actually getting done in the Republican-led U.S. Senate.
On Wednesday morning that business included a hearing to
roll back a key component of the Obama administrations
efforts to expand retirement in the U.S. On March 8, Senator
Orrin Hatch introduced a resolution that would repeal the
Department of Labors January 19th ruling made the
day before the inauguration of President Trump allowing
cities and municipalities to create
auto-enrolment plans for private-sector employees at
companies that do not offer 401(k) programs to their employees.
The DoL had previously issued a ruling green lighting similar
programs at the state level.
Hatchs bill took the form of a CRA resolution, passed
in 1996. That resolution, the Congressional Review Act, allows
Congress to overturn new federal legislation under certain
Senate president pro tempore Hatch and Majority Leader Mitch
McConnell characterized the DoL actions as an example of
executive overreach by the Obama administration.
Even on its way out the door, the Obama administration
pushed forward with more unfair regulations that hurt the
middle class, McConnell said in his introductory remarks.
They tried to advance regulations that threatened jobs
and hindered economic growth. They tried to shift power away
from people and toward government on everything from education
to land management issues. And under the guise of helping more
people save for the future, it undercut a system of private
retirement savings that served millions of Americans very well
Key from a Republican perspective is that these programs
would be overseen by states or municipalities and not covered
by the Employee Retirement Income Securities Act of 1974
(ERISA), with oversight by the Department of Labor. Instead the
authority for these funds would rest at the local level. Hatch
and McConnell argue that this means would be pensions would
lack protection; they would prefer a centralized system. Hatch
in the past has pushed for annuity-based savings programs.
Critics argue that the Republican agenda which has
the support of the Chamber of Commerce and others favors
the insurance and 401(k) industries, not working people. They
argue that the systems operated by states and municipal systems
have perfectly adequate investor protections along the
lines of state and municipal public pension plans or college
Hatch and McConnell made clear they are coming for the state
programs next. Later we will advance another CRA to
protect workers from similar efforts at the state level,
said Senator McConnell. Hopefully, sometime soon, the
Senate will pass the original CRA resolution with the one that
covered states like California and Illinois, Hatch said
in his remarks. California and Illinois are among the states to
have signed into law such retirement savings programs, and many
other states are
studying the issue.
One Senate Democrat to speak out against efforts to repeal
the DOL rulings was the junior Senator for Hawaii, Mazie
Hirono. Unlike her Republican colleagues who argued that
the private retirement programs were taking away investor
protections Democrat Hirono argued that the
private-sector pensions are empowering and offer a leg up to
low-income working people.
In Hawaii about 50 percent of private sector workers
have jobs that dont provide retirement benefits,
Hirono said of her home state. According to a recent
survey by AARP Hawaii, 56 percent of working-age people feel
anxious about having enough money saved for retirement. For
generations, Americans relied on the three-legged stool of
private savings: social security, private savings, and a
pension from their employer. Those days are gone.
Hatch, who has a long track record of campaigning for
broader retirement savings, is not immune to the irony of
Republicans auguring to take rights away from the states.
I know some have concerns about the federalism
implications in rolling back these DOL department of labor
regulations, the Utah Senator said in his remarks.
However, lets be clear, prior to the implementation
of these regulations, states were free to pass laws to
encourage opportunities for private sector workers and they
will be free to do so after this CRA resolution is signed by
His Hawaiian colleague, however, speculated that the
Republican might have ulterior motives. Cynics would say
Republicans are doing this to help some private entities sell
more retirement plans to people, Hirono noted.
However, the reality is that millions of families are not
being served. Killing these rules is the latest Republican
attack on working people.
On Thursday morning a joint resolution to repeal the city
and municipal ruling passed the Senate, with 50 yay votes and
four no votes.