President Trump used the Congressional Review Act Thursday to undo a federal rule imposed by the Obama administration in its final days, rolling back a regulation by the Labor Department that allowed local governments to create employee retirement plans for private-sector workers.
The Obama administration's rule was intended to encourage city and county governments to set up IRA programs for workers whose employers do not offer 401(k)s and other retirement plans. The programs were excluded from the federal Employee Retirement Income Security Act to limit the local governments' liability and make it easier for the governments to set up the accounts.
Republican critics argued the ERISA exemption wouldn't have benefited workers but would have created burdens on employers. Rep. Francis Rooney, R-Fla., author of the resolution Trump signed, said the rule would haved resulted in workers being forced into government-run plans with fewer protections and less control over their savings.
"This resolution eliminates one of several last-minute regulations put in place by the Obama administration. These new regulations, enacted without the consent of Congress, would add billions of dollars in cost to consumers and businesses," Rooney said.
The administration, which also created an exemption for similar state programs, argued that they were necessary to ensure that more workers had at least some retirement savings.
"For workers without access to savings arrangements through their employers, this rule means a new way to secure their financial futures," said then-Secretary of Labor Tom Perez when the ERISA exemption for states was announced in August.