This morning, the New York Times editorial board sharply condemned a group of 47 House Democrats who are trying to help retirement advisers rip you off.
The 47 Democrats in question sent a letter to Secretary of Labor Tom Perez last Friday to ask him to delay the rule-making process for the Obama administration's proposed rule to address conflicts of interest in retirement advice. The rule seeks to prevent retirement advisers from putting their own financial interest above that of their clients by requiring them to abide by a "fiduciary" standard.
The DOL's fact sheet on the proposed rule explains why the rule is necessary:
A system where firms can benefit from backdoor payments and hidden fees often buried in fine print if they talk responsible Americans into buying bad retirement investments—with high costs and low returns—instead of recommending quality investments isn't fair. A White House Council of Economic Advisers analysis found that these conflicts of interest result in annual losses of about 1 percentage point for affected investors—or about $17 billion per year in total. To demonstrate how small differences can add up: A 1 percentage point lower return could reduce your savings by more than a quarter over 35 years. In other words, instead of a $10,000 retirement investment growing to more than $38,000 over that period after adjusting for inflation, it would be just over $27,500.
Why is the letter so deplorable? Back to the NYT:
The request is disingenuous. The Labor Department has already held a long comment period on its proposed rules, including four days of public hearings. The next step is to review the comments and then issue final rules.
The Democrats’ request, if granted, would interrupt this process and very likely make it impossible to finalize the rules before the end of 2016, leaving the next administration to grapple with them anew (if a Democrat wins) or ditch them (if a Republican wins).
Worse, the request could be harmful even if it is denied. After final rules are issued, they will almost surely be challenged in court by opponents in the financial industry, who would most likely cite a refusal to allow more comment as evidence that they were not given enough time to weigh in.
The request is also duplicitous. Most of the signatories had voted earlier against a Republican bill to stop the rule-making, which allowed them to cast themselves as champions of the rules. But asking for a delay could achieve the same obstructionist goal.
Here are the 47 Democrats:
Kyrsten Sinema (AZ-09)
John Garamendi (CA-03)
Mike Thompson (CA-05)
Eric Swalwell (CA-15)
Jackie Speier (CA-16)
Jim Costa (CA-16)
Tony Cardenas (CA-29)
Brad Sherman (CA-30)
Pete Aguilar (CA-31)
Ted Lieu (CA-33)
Norma Torres (CA-35)
Alan Lowenthal (CA-47)
Scott Peters (CA-52)
John Larson (CT-01)
Jared Polis (CO-02)
Joe Courtney (CT-02)
Elizabeth Esty (CT-05)
Frederica Wilson (FL-24)
Sanford Bishop (GA-02)
David Scott (GA-13)
David Loebsack (IA-02)
Robin Kelly (IL-02)
Mike Quigley (IL-05)
Cedric Richmond (LA-02)
Richard Neal (MA-01)
Seth Moulton (MA-06)
Emanuel Cleaver (MO-05)
Brad Ashford (NE-02)
Annie Kuster (NH-02)
Donald Norcross (NJ-01)
Michelle Lujan Grisham (NM-01)
Steve Israel (NY-03)
Kathleen Rice (NY-04)
Grace Meng (NY-06)
Joe Crowley (NY-14)
Sean Maloney (NY-18)
Joyce Beatty (OH-
Kurt Schrader (OR-05)
Brendan Boyle (PA-13)
David Cicilline (RI-01)
Jim Langevin (RI-02)
Jim Cooper (TN-05)
Henry Cuellar (TX-28)
Gerry Connolly (VA-11)
Suzan DelBene (WA-01)
Derek Kilmer (WA-06)
Ron Kind (WI-03)