Russia, immigration, health care—Trump has bigger fish to fry, so don’t expect much movement with the fiduciary rule one way or another. That was the generally accepted attitude in the aftermath of the election and something pundits and politicos routinely pitched. They were (very) wrong.
Just how wrong is detailed by The Wall Street Journal Wednesday in a scathing op-ed that employs words like “mutiny” and “rebellion.” It describes attempts by the bureaucracy (which we assume to mean DOL rank-and-file) to resist the president’s regulatory overhaul, with the fiduciary rule as casus belli.
The short take is that there’s a Deep State of sorts operating within the department that’s determined to see the rule through, President be damned.
“[Trump] asked Labor to investigate whether the rule is likely to reduce access to retirement-savings vehicles or related financial advice, whether the rule has caused disruptions in the industry that may harm retirees and investors, and whether it will lead to more lawsuits,” the Journal recaps in what is now rote for 401k advisors.
Holdovers from the Obama Administration said that “the Department has concluded it would be inappropriate to broadly delay application of the fiduciary definition and Impartial Conduct Standards.”
In other words, “We don’t care what an elected President says,” the paper helpfully translates.
It’s all part of a broader strategy to delay. No, not the rule’s implementation, but rather its repeal. If it gets too far down the road, its proponents reason, it’ll be too entrenched to do anything about, with the (then) high cost of killing it acting as deterrent.
“The slow pace of Trump nominations has encouraged this kind of rebellion across the executive branch, as Obama holdover Sally Yates showed when she still ran the Justice Department,” the paper concludes by way of proof. “Mr. Trump’s deregulation project is one of the keys to faster economic growth, and he needs his people on the job as fast as possible.”
Prevent defense, running out the clock; a poor way to play football, worse with policy. As much as we might not like to admit, elections have consequences. The DOL’s stall tactic, while noble in theory, only serves to further inflame an already volatile political and regulatory situation. It’s unhealthy for investors, our industry and the country as a whole.