Hatch Urges Support for Rollback of Harmful Obama Rule

Utah Senator Says, “There is a growing consensus here in Washington and throughout our country that the U.S. economy – our workers, businesses, and job creators – are horribly overregulated.”

WASHINGTON – In a speech on the Senate floor today Finance Committee Chairman Orrin Hatch (R-Utah) called on his Senate colleagues to support H.J. Res. 66, a resolution that would rescind an Obama-mandated regulation that encourages states to impose conflicting and burdensome mandates on private-sector businesses and eliminates long-standing federal protections for retirement workers.

“States like California, Oregon, Connecticut, Maryland, and Illinois are already using this authority to impose new mandates on both large and small employers, including start-up businesses. Some of the mandates apply regardless of the size of the business,” Hatch said. “The regulation also encourages states to bar private workers’ access to their retirement accounts. And, it 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.”

Hatch went on to note the importance of enhancing the system that gives workers more access to retirement programs and highlighted his work on a bipartisan bill that increases coverage for employees in workplace retirement programs.

“I agree that we need to enhance this system to give more workers access and incentives to participate,” Hatch said. “I’ve been working with my colleagues on both sides of the aisle to address this issue. Last Congress, the Senate Finance Committee unanimously approved the Retirement Enhancement and Savings Act of 2016, a bipartisan bill designed to increase voluntary retirement savings. My bill provides workable, voluntary solutions to give more workers access to retirement plans.”

Earlier this year, Hatch introduced the Senate companion to H.J. Res. 66 and urged colleagues to support H.J. Res. 67, a separate resolution to repeal another harmful Obama-era regulation that eliminated federal protections for retirement savings of private-sector workers. 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, as we continue this historic effort in Congress to repeal harmful regulations, I rise today in support of H.J. Res. 66.

     Due to the aggressive regulatory posture taken by the Obama Administration in its final months, Congress has had to spend a significant portion of its time repealing regulations under the Congressional Review Act. And, our level of success has been unprecedented.

     Before 2017, only one CRA resolution had ever been successfully passed by Congress and signed by the President. If passed and signed, H.J. Res. 66 would be the 14th CRA resolution enacted this year.

     That’s remarkable, Mr. President. It’s unfortunate that we’re in this situation, no doubt, but our success in rolling back harmful regulations is a positive step in my view.

     There is a growing consensus here in Washington and throughout our country that the U.S. economy – our workers, businesses, and job creators – are horribly overregulated. Regulations promulgated by the executive branch take hundreds of billions of dollars out of our economy.

     The resolution before us will repeal a regulation that President Obama apparently personally ordered Labor Secretary Tom Perez to draft as a gift to certain blue states.

     The regulation eliminated long-standing federal protections for the retirement savings of private-sector workers, specifically giving states a “safe harbor” from the protections workers have had for decades under ERISA if the state requires employers to either set up a retirement plan or enroll its employees in a state-run plan.

     These state plans do not have to be portable, nor do they have to permit workers to withdraw their savings at any time.

     States like California, Oregon, Connecticut, Maryland, and Illinois are already using this authority to impose new mandates on both large and small employers, including start-up businesses. Some of the mandates apply regardless of the size of the business.

     The regulation not only encourages states to impose conflicting and burdensome mandates on private-sector businesses, it also encourages states to bar private workers’ access to their retirement accounts. And, it 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.

      Some states have already made it clear that, once they take control of the private worker assets, they intend to invest them just like they invest their state pension plan assets.

     For anyone who is following our nation’s current public pension crisis, that’s not a pretty picture, and that’s being kind.

     Put simply, states like California and Illinois shouldn’t get a pass on investing potentially billions of dollars in private worker retirement assets without having to follow federal rules requiring prudent investment practices—rules designed to protect retirement nest eggs of hard-working Americans.

     Mr. President, I am all for increasing coverage for employees in workplace retirement programs. I’ve been working with my colleagues on both sides of the aisle to address this issue.

     For example, last Congress, the Senate Finance Committee, which I chair, unanimously approved the Retirement Enhancement and Savings Act of 2016, a bipartisan bill designed to increase voluntary retirement savings.

     My bill – and others like it – provides workable, voluntary solutions to give more workers access to retirement plans.

     And I emphasize the word “voluntary.”

     In America, we have a voluntary defined contribution retirement system for private businesses, and the voluntary approach, with appropriate incentives for workers and employers, is far better than the one taken by the Obama Administration and former Labor Secretary Tom Perez, which would take us down the path toward government-mandated and government-run retirement plans.

     That’s not really hyperbole, Mr. President, that’s essentially the stated purpose of these types of regulations.

     The current retirement savings system clearly demonstrates the superiority of the free market over government mandates when it comes to retirement savings.

     Private retirement savings vehicles, like 401(k)s and IRAs, that have been encouraged – but not mandated – by federal tax laws, have produced nearly $14 trillion in wealth and savings for the middle class. Let me repeat that: private retirement savings vehicles, with encouragements and investor protections, but not mandates, have produced nearly $14 trillion in wealth and savings for middle class Americans.

     I agree that we need to enhance this system to give more workers access and incentives to participate. But, there’s absolutely no justification for any effort to reinvent the retirement savings system in order to give primacy to government-run plans.

     I can only wonder why states think they will be able to produce better results than the private retirement savings system, which has been an unqualified success. And, I have to wonder how some of my colleagues who value consumer financial protection, as I do, would want to see abandonment of rules, under the guise of a safe harbor, that erode protections for the savings of workers and future retirees.

     We can do our part to undo this harmful regulation by passing H.J. Res. 66. Toward that end, I urge all of my colleagues to vote in favor of this resolution.

     With that, I yield the floor.

###

Next Article Previous Article