House Republicans voted Thursday to block President Obama’s new rule on conflicts of interest in retirement planning, underscoring their opposition to the far-reaching regulation.
No Democrats joined them, however, in a sign that the party lines have hardened following the finalization of the rule.
The chamber voted 234-183 to stop the rule, which would set standards for retirement advisers to ensure that they act in their clients’ best interests, under the Congressional Review Act.
House Speaker Paul Ryan criticized the rule as “Obamacare for financial planning.”
Without Democratic help, the resolution fell far short of the votes necessary to override an Obama veto, which the White House has threatened.
The Labor Department rule is meant to prevent advisers from steering savers with IRAs or other tax-privileged retirement plans into inappropriate high-fee investment products for which the advisers receive a kickback. It would broaden the category of advisers, brokers and insurers who are required to act in their clients’ best interests. After a comment period that involved heavy lobbying, the rule is scheduled to go into effect next April.
Republicans oppose the new regulation because, they say, it will increase paperwork and legal fees and prevent many firms from being able to provide investing advice to low-income savers and small businesses.
Although many Democrats expressed concern about the effects of the new definition of “fiduciary” earlier in the rule making process, Thursday’s vote indicated that opposition from within the president’s own party has ebbed.
Rep. Richard Neal, the Massachusetts Democrat who had previously teamed with Republican Rep. Peter Roskam of Illinois on a bill to block the Labor Department’s rule and institute a different best standard, on Thursday said the changes to the final rule had allayed his concerns.
“Republicans may have the votes to pass the disapproval resolution on a simple majority,” Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, said on the House floor. “But the president will veto this bill, and Democrats will stand strong to ensure that they cannot override that veto.”
