WASHINGTON, D.C. | February 15, 2017
I rise today in strong support of H. J. Res 66, a resolution to protect retirement savers.
During the final days of the Obama administration, the Department of Labor created a regulatory loophole that threatens the retirement security of working families.
We are here today to use Congress’s authority under the Congressional Review Act to close that loophole by blocking a misguided regulation from taking effect.
The regulation paves the way for states to force certain employers to automatically enroll their employees into government run IRAs. States would be allowed to skirt federal law and deny workers important protections designed to safeguard their retirement savings.
The Obama administration’s action is somewhat perplexing. The Employee Retirement Income Security Act, or ERISA, has enjoyed strong bipartisan support for decades. As President Ford said when he signed the law, the American people would have “greater assurances that retirement dollars will be there when they are needed."
Yet over 40 years later, the same administration that frequently touted the importance of consumer protections moved to exempt states from ERISA. The question is: why? To facilitate the creation of government-run plans that would lack basic protections for retirement savers. As a result, workers and retirees would have nowhere to turn if their savings were mismanaged.
Let’s be honest about what this regulation is really about. It’s part of an assault on small business retirement plans that began under the Obama administration.
First, small businesses were hit by a fiduciary rule that would make it harder for them to access the financial advice they need to set up retirement plans for their employees.
Then, the Obama administration created a last-minute regulatory loophole that could discourage small businesses from offering retirement plans in the first place. As a result, many families could soon realize, “if you like your 401(k), you may not be able to keep it.”
Because of this loophole, taxpayers are also at risk. Many of the states leading the charge on these government-run plans have a long history of mismanaging public employee pensions. Today, there is an estimated $5 trillion in unfunded state pension promises.
That figure is completely unsustainable. And it begs the question: will taxpayers or retirement savers foot the bill if these government-run IRAs are similarly mismanaged?
However, we are not here today to debate the merits of state policy. To be clear, states should be free to experiment with new retirement options, and more options are certainly needed. It’s up to voters in each state to hold their elected officials accountable.
The point of this debate is that states should not be exempt from a law that has – for decades – provided important protections for retirement savers. If states want to come up with new ways to help workers save for retirement, they can. But they should follow the law in the process.
The goal of this resolution is simple. It is to uphold protections Congress – including members of both parties – has long afforded retirement savers.
Today, we can close a regulatory loophole that would be detrimental to the retirement security of hardworking Americans, and we can ensure retirement savers in every state continue to have the same protections under federal law.
I urge my colleagues to support strong protections for retirement savers by voting in favor of H. J. Res 66.