In a speech on the Senate floor, Finance Committee Chairman Orrin Hatch (R-Utah) called on his Senate colleagues to support H.J. Res. 67, a resolution that would repeal an Obama-era regulation that encourages municipalities to impose burdensome mandates on private sector businesses and eliminates long-term federal protections for retirement savings of private-sector workers.
“These regulations encourage state and municipal governments to impose conflicting and burdensome mandates on private-sector businesses and to bar private workers’ access to their retirement accounts,” Hatch said. “Places like New York City shouldn’t just get a pass on investing potentially billions of dollars in private worker retirement assets without regard to federal rules requiring prudent investment practices—rules designed to protect retirement nest eggs of hard-working Americans.”
Hatch went on to note the importance of increasing coverage for employees in workplace retirement programs and highlighted his work on a bipartisan bill that increases voluntary retirement savings for American workers.
“I am all for increasing coverage for employees in workplace retirement programs,” Hatch said. “Last Congress, the Senate Finance Committee, which I chair, unanimously approved the Retirement Enhancement and Savings Act of 2016, a bipartisan bill that will increase voluntary retirement savings. It includes a number of provisions from a bill I introduced a few years before that, one that received high marks from analysts and stakeholders in the retirement-security community.”
Earlier this month, Hatch introduced the Senate companion to H.J. Res. 67. In 2016, the Senate Finance Committee unanimously approved the Retirement Enhancement and Savings Act of 2016 (RESA), S. 3471, bipartisan legislation that aims to increase voluntary retirement savings.
The complete speech as prepared for delivery is below:
Mr. President, by any measure, our efforts in this Congress to repeal harmful regulations through the Congressional Review Act has been historic. Prior to this year, only one CRA resolution had EVER been passed by Congress and signed by the President. This year, we have already successfully rolled back 11 regulations that were proposed and finalized under the previous administration.
That’s remarkable, Mr. President.
I think our success in this endeavor can be attributed to a few factors. First, in its last year, the Obama Administration was particularly aggressive in its regulatory efforts. A number of regulations were finalized after the election, right up until the day President Trump was inaugurated. In fact, the regulation at issue today was finalized on January 19, the day before the inauguration.
In other words, the Obama Administration left Congress and the new administration with a target-rich environment for CRA resolutions.
Another important factor has been the realization by the American people that our economy – our workers, our businesses, and our job creators – are grossly overregulated. The regulatory state extracts hundreds of billions of dollars from our economy, much of it needlessly so.
These CRA resolutions are part of a much broader effort to undo some of that damage.
Today, I am pleased to be able to express my support for H.J. Res. 67, which will likely be the twelfth CRA resolution we pass this year.
This resolution, once passed and signed, will rollback a last-second Department of Labor regulation that eliminated long-standing federal protections for the retirement savings of private-sector workers. Specifically, the regulation builds off of a prior regulation that gave states a “safe harbor” from the protections workers have under ERISA if the government mandates that employers who do not offer retirement plans either set one up or join the government plan. These government-run plans do not have to be portable, nor do they have to permit workers to withdraw their savings at any time.
The resolution we’re debating now would roll back the regulation that provided this authority to municipalities such as New York City. Hopefully, sometime soon, the Senate also will debate and pass the CRA resolution relating to the original regulation, the one that focused on the states, like California and Illinois.
Combined, these regulations encourage state and municipal governments to impose conflicting and burdensome mandates on private-sector businesses and to bar private workers’ access to their retirement accounts. And, they would let states invest private workers’ retirement assets, ignoring provisions in federal pension law that require prudent pension investment practices and that ban kickbacks and self-dealing.
To be blunt, places like New York City shouldn’t just get a pass on investing potentially billions of dollars in private worker retirement assets without regard to federal rules requiring prudent investment practices—rules designed to protect retirement nest eggs of hard-working Americans.
Now, don’t get me wrong, Mr. President, I am all for increasing coverage for employees in workplace retirement programs. In fact, it’s something I’ve been working on for some time with my colleagues on both sides of the aisle.
Last Congress, the Senate Finance Committee, which I chair, unanimously approved the Retirement Enhancement and Savings Act of 2016, a bipartisan bill that will increase voluntary retirement savings. It includes a number of provisions from a bill I introduced a few years before that, one that received high marks from analysts and stakeholders in the retirement-security community.
My bill – and others like it – provide workable, voluntary solutions to give more workers access to retirement plans. This approach is far better than the one taken by the Obama Administration and former Labor Secretary Tom Perez, which would purposefully take us down the path toward government-mandated and government-run retirement plans.
The retirement savings system that has been in place for decades now is one of the clearest examples we have to demonstrate the superiority of the free market over government mandates.
Private retirement savings vehicles, including 401(k)s and Individual Retirement Accounts, that have been encouraged – but not mandated – by federal tax laws, have produced nearly $14 trillion in wealth and savings for the middle class.
I know some have concerns about the federalism implications in rolling back these DOL regulations.
However, let’s be clear: Prior to the implementation of these regulations, states were free to pass laws to encourage retirement savings opportunities for private-sector workers, and they’ll be free to do so after this CRA resolution is signed by President Trump. They’ll simply have to observe the longstanding rules and protections that have been in place under federal pension laws, including the ban on self-dealing and the duty to invest prudently. And, they won’t be able to offer plans on an uneven playing field that favors government retirement plans over those produced in a free, private-sector market.
Ultimately, I have to wonder why states and municipalities want to do away with these protections in the first place. I also have to wonder why they think they will be able to produce better results than the private retirement savings system, which has been an unqualified success, benefitting workers and employers alike. And, I have to wonder how some of my colleagues who value consumer financial protection, as I do, would want to see continuation of rules that erode protections for workers and future retirees.
The first step to undoing these harmful regulations is the passage of H.J. Res. 67. Toward that end, I urge all of my colleagues to vote in favor of this resolution.
With that, I yield the floor.