Labor chief says he can’t snap his fingers and undo Obama rule

Labor Secretary Alexander Acosta pushed back Wednesday when asked why his department is implementing a financial adviser rule put in place by the last administration, telling lawmakers he can’t snap his fingers and undo a regulation.

Republicans on a House Appropriations subcommittee pressed Acosta on the Obama-era financial adviser rule, which he announced last week would take effect on June 9 after the department found no legal basis for a further delay.

At a budget hearing Wednesday, Acosta told lawmakers he’s still looking at the rule even though it will take effect Friday.

He said the Office of Management and Budget has asked the public to comment on how the rule is being implemented and the impact it has.

“That’s the first step in this administration’s review of the rule, but we need that information and we need that data in order to decide how to proceed,” Acosta said.

But Rep. Steve Womack (R-Ark.) wanted to know what Acosta meant when he said the department is looking at the rule. 

Acosta explained that Administrative Procedures Act, which requires a new rule to change an old rule, binds him from simply squashing it. To issue a new rule, he noted, would require going through the same lengthy process as the one used to write the old rule.

“If there were to be a change, that change would have to be based on information obtained through a record process, the first step of which is a request for information,” he said.

Though the process seems cumbersome, Acosta said it’s how democracy works.

“And no one in government should be able to snap their fingers and undo laws or undo rules because that’s not a respect for a fundamental democracy,” he said.

Critics of the rule, particularly in the business world, have warned the rule will impede Americans’ ability to access financial advice.

Womack asked about the impact the rule will have on younger generations that are just now beginning to save for retirement.

Acosta explained that those concerns were voiced in the original rulemaking process, but the Obama administration decided to move forward anyway.

“At this point the APA and administrative law prohibits me from prejudging a rule,” he said.