The fiduciary regulation wasn’t a big focus of the March 22 hearing on Alexander Acosta’s nomination as Secretary of Labor – but it did come up.
Indeed, those waiting to hear what Acosta thought about the fiduciary rule, and its future had to wait until the last 15 minutes of the 3-hour hearing by the Senate Health, Education, Labor and Pensions (HELP) Committee.
It was mentioned in the opening statement by Committee Chairman Lamar Alexander (R-Tenn.) as he recounted a number of Labor Department regulations that he maintained had hindered job growth. As for the fiduciary regulation, Alexander said it was going to make it “more expensive for the average worker to get investment advice.”
After that, except for a brief line of questioning about multiemployer pension plan liabilities, notably the Teamsters’ Central States Pension Fund, from Sen. Al Franken (D-Minn.), retirement issues took a back seat to other labor issues such as workplace safety, equal pay for women, the expanded overtime rule and OSHA’s silica rule – the latter consuming most of Sen. Elizabeth Warren’s (D-Mass.) first round of questions for Acosta.
However, in the second round Warren, acknowledging that she hadn’t had much luck getting Acosta to comment on his actions in support of the silica rule were he to be confirmed, turned to the fiduciary regulation. “You’ve refused to answer, hiding behind the executive order,” she began, and then said she wasn’t asking him to speak to how he would respond to President Trump’s executive memorandum, but to what his priorities and values were. She characterized the fiduciary regulation as designed to “protect workers saving for retirement from advisors who would cheat them,” noted that the Trump administration was working on a 60-day delay in the applicability date, and asked Acosta if he would he stop it if he is confirmed before that delay is finalized.
Acosta said that as directed by President Trump’s executive memorandum, he would review the fiduciary rule; that criteria in the executive action regulates and determines the DOL response to the fiduciary rule; and that he would assess the rule in response to those specific questions.
Warren claimed that a 60-day delay would cost Americans $3.7 billion – a period during which she said, “…they’re just going to get cheated” by unscrupulous advisors. The $3.7 billion is based on an estimate by the liberal Economic Policy Institute on what that delay might cost Americans saving for retirement over their lifetimes, not just the 60 days.
Acosta refused to be drawn in, however. “There is an executive action that directs how the Department of Labor will approach this rule,” Acosta said. “If I am confirmed as Secretary of Labor, I believe and support my following executive orders of the president, who would be my boss.”
He also responded to a comment by Warren that the rule established a standard of conduct by stating that the fiduciary rule “goes far beyond simply addressing the standard of conduct” of investment advisers – a characterization Warren rejected.
Warren closed by noting that she had posed her questions to Acosta when they met two weeks previously, and that at that time he had said he would get answers. ““If you can’t give me straight answers on your views to stand up for American workers, then I don’t have any confidence you are the right person for the job,” said Warren.
Immediately following that exchange, Sen. Alexander leapt to Acosta’s defense, noting that it would be presumptuous for Acosta to stake out a position before he was actually in the office. Moreover, Alexander said that he, along with others in the Senate, had concerns about the impact of the fiduciary rule, which would “deprive millions of Americans of advice,” he said.
The HELP committee has scheduled a vote on Acosta’s nomination on Thursday, March 30.