On April 7, the Labor Department delayed the effective date of its much-anticipated fiduciary rule, pursuant to President Trump’s directive to re-examine it. The fiduciary rule simply requires financial advisers to act in their clients’ best interests when they provide retirement advice, much like your doctor or lawyer is required to do. The Labor Department’s recent action postponed the rule’s effective date by 60 days, and delayed some of its key protections until the beginning of 2018.
This decision to delay is certainly not above criticism. Building upon the department’s own methodology, the Economic Policy Institute found that the delay cost retirement savers far more than the department calculated. More to the point, there is no substantial additional information that warrants revisiting the robust economic impact analysis that the department already conducted prior to issuing the rule, which has thus far been upheld in three jurisdictions.
{mosads}Nothing about the delay, however, merits the misleading attack levied on career civil servants in an April 24 column in The Hill. The column mischaracterizes the fiduciary rule (it requires a heightened standard of care, not compliance), and present dubious economic analysis as if it were gospel (in fact, nearly all independent analysis of the financial advice market suggests the fiduciary rule will save retirees billions of dollars in fees and forgone returns). But they go beyond most other opponents by launching a groundless assault on the career civil servants who worked on the delay, and who are powerless to defend themselves.
To begin with, nothing about the delay was the career staff’s final call. It is utterly implausible that the text of the decision could get out of the Labor Department without approval of the head of the agency’s legal department — a Trump political appointee. Moreover, with a history of White House, congressional and federal agency service between them, surely the authors of the April 24 column also know that the Office of Information and Regulatory Affairs (OIRA) circulates decisions like this one far and wide through White House policy councils and other federal agencies for review and approval before they are announced.
Yet nowhere does their column mention OIRA and its process, let alone the 15 stakeholder meetings that it held before the Labor Department issued the delay, many of which were attended by Trump administration appointees. Thus, if the delay was the result of the “bureaucratic tomfoolery at its finest,” as the columns says, it is Trump’s own appointees they are indicting.
Next, the allegation that career staff — even in their limited role — were “Obama holdovers” sends a dangerous signal. No Obama political appointees remain at the Labor Department. And while the career staff roster includes individuals who came on board during the Obama years, it includes many who joined under Presidents Bush (41 and 43), Clinton, Reagan, Carter, and beyond. (I myself served as a career attorney back in the first Bush administration.)
There is simply no evidence to suggest that a cabal of Obama administration “holdovers” hijacked the process, as the April 24 piece asserts, or that the career staff relied on anything other than the administrative record and the relevant administrative procedures when considering delay. The implication that any president should get his or her “own” career staff sends a chilling threat to the civil service, a fundamental institution of our government.
This leads to column’s final misrepresentation. Contrary to the implication that the Labor Department could delay the rule further to pursue yet another duplicative review, agency actions require an evidentiary basis. A simple review of the final delay shows that a 60-day delay was itself legally risky based on the extensive administrative record supporting the fiduciary rule. The delay was necessary only because of the uncertainty created by the Trump administration itself. The Labor Department had no justifiable basis to delay the fiduciary rule any longer.
Reasonable people can disagree over the particulars of the Labor Department’s decision to delay the fiduciary rule, but let’s be fair in describing the process that led to it. Administrations come and go, but the civil service remains as the stewards of our democracy. Attacking the Labor Department’s civil servants is an unwarranted and unfair low.
Christine Owens is executive director of the National Employment Law Project.
The views expressed by contributors are their own and are not the views of The Hill.