The U.S. Chamber of Commerce is pressuring lawmakers to block President Obama’s new rule on conflicts of interests in retirement advising when it comes up for a vote in the Senate Tuesday, while liberals are rallying against the effort.
Bruce Josten, the business group’s top lobbyist, sent a letter to senators warning them that the Chamber might “key vote” the effort to block the rule by using the Congressional Review Act, meaning that it would factor into the Chamber’s overall ratings of lawmakers. The CRA can be used by Congress to block rules issued by the executive branch.
Senate Majority Leader Mitch McConnell teed up the vote earlier Monday. Under the CRA, debate in the Senate is limited, and Republicans could pass the resolution with only a simple majority, sending it to President Obama’s desk.
Although Obama is certain to veto the measure, the vote will put senators on record and, with the Chamber’s announcement Monday, potentially expose Democratic members to business opposition.
The rule, finalized in April and set to take effect in April 2017, would reshape the retirement financial planning industry. The Department of Labor will mandate that all retirement advisers act in their clients’ best interests, a standard to which many in the industry have not previously been held.
The Obama administration backs the rule on the grounds that it will stop brokers from guiding clients into inappropriate high-fee investment products for which the brokers receive kickbacks. Republicans have argued that the complex rule will cut off low-income savers’ access to financial advice.
Speaking on the Senate floor Monday, McConnell said administration officials “don’t seem to care about the harm it might cause.”
Elizabeth Warren, D-Mass., a top liberal proponent of the rule, sent out a fundraising email Monday morning from her Senate campaign, accusing the GOP of trying to make it “easier for giant Wall Street banks to cheat Americans out of their retirement savings.”
While some congressional liberals pushed hard for the rule, many Democrats expressed reservations about it before the final version was unveiled. No Democrats, however, voted for the House resolution to block it from going into effect.
