As both a senator and a presidential candidate, Sen. Kamala Harris (D-CA) has embraced a number of positions on key retirement issues that could be campaign issues.
As the second African American woman and first South Asian-American senator to serve in the U.S. Senate, Harris now becomes the third woman to run on a major party’s presidential ticket as Vice President. While policy positions are still emerging, in reviewing her previous stances on financial and retirement policy with that of former Vice President Joe Biden and the current Democratic party platform, there appears to be considerable overlap.
Harris’ Retirement Policy Background
A first-term senator, Harris has not served on the Senate’s main retirement policy committees—including the Senate Finance Committee and the Senate Health, Education, Labor and Pensions Committee—but she has been active in pursuing and cosponsoring a number of broad-based policy initiatives.
Financial Transaction Tax. One such example is her support for a financial transaction tax to pay for a “Medicare-for-all” proposal. Nearly all of the Democratic presidential candidates supported an FTT, including Biden. Her proposal would tax stock trades at 0.2%, bond trades at 0.1%, and derivative transactions at 0.002%, which, at the time, was twice that of other presidential aspirants. Harris claimed that the proposal would raise “well over $2 trillion” over a 10-year period to pay for her proposal, which—even though it’s described as directed at investors and big banks—would also ensnare investors in 401(k)s, IRAs and pensions.
Fiduciary Rulemaking. Harris recently joined other leading congressional Democrats in calling on the Department of Labor to withdraw its investment advice package and start over. In the Aug. 6 letter, Harris along with the other members urged the DOL to immediately withdraw both the final rule and a proposed prohibited transaction exemption allowing investment advice fiduciaries to receive compensation, arguing that the package is not in the best interests of retirement savers.
State-run Plans. In May 2017, she joined nearly 20 other Democratic senators in cosponsoring legislation to restore the Obama administration’s safe harbor exemption for state-run auto-IRA programs from ERISA that had just been overturned under a resolution approved by the Senate under the Congressional Review Act and was canceled by President Trump.
While the bill restoring the exemption was not acted on at the time, the Preserve Rights of States and Political Subdivisions to Encourage Retirement Savings (PROSPERS) Act was designed to ensure that states and cities can continue to create retirement savings programs for workers in the private sector. It would have done so by amending ERISA to provide an exemption for individual retirement plans established and maintained pursuant to a payroll deduction savings program of a state or a qualified political subdivision of a state. This remains an issue today, as many states and municipalities continue trying to implement these programs.
Multiemployer Relief. Harris is also a cosponsor of the Senate Democrat’s companion legislation to the House-passed bill to provide relief for the struggling multiemployer pension system. Known as the Butch Lewis Act, the bill, among other things, would create a loan program to allow failing pensions plans to borrow the money they need to “put plans back on solid ground and ensure they can meet their commitments to retirees and workers for decades to come.”
The multiemployer funding crisis remains an ongoing issue. Multiemployer funding relief along the lines of what the House passed in July 2019 was included in the House-passed HEROES Act, which was the starting point for the now-stalled negotiations with the Senate on an additional COVID-19 relief package.
Women’s Protection. Harris has also cosponsored legislation to address some of the challenges that families face as they plan for retirement, particularly for women. Introduced in 2018, the Women’s Pension Protection Act would, among other things:
- expand existing spousal protections for DB plans to DC plans;
- provide grants for community-based organizations help increase women’s financial literacy; and
- support low-income women and survivors of domestic abuse seeking retirement benefits by providing community-based grants to organizations that assist them in obtaining qualified domestic relations orders.
Democratic Platform
As for how those positions might align with that of the presumptive Democratic party nominee for President, the most detailed retirement policy recommendations from the Biden camp previously were contained in the “Biden Plan for Older Americans” released in July 2019, which includes a section calling for reforms to the private sector retirement system, such as equalizing the savings incentives in DC plans for middle-class workers and providing access to an “automatic 401(k)” plan for almost all workers without a current pension or 401(k)-type plan.
The draft 2020 Democratic Party Platform—which presumably will be finalized at the DNC’s virtual convention next week—is consistent with Biden’s earlier policy proposals, if somewhat vague, noting that the party “will support approaches to retirement saving that enable workers and retirees to prepare for and prosper in retirement, including reforms that will allow states and municipalities to create public individual and pooled retirement account options that are easy for workers to access and understand.”
The platform also signals that the party will seek to overturn efforts by the Trump administration on fiduciary rulemaking, noting that Democrats “will take immediate action to reverse the Trump Administration’s regulations allowing financial advisors to prioritize their self-interest over their clients’ financial wellbeing.”
