Obama's fiduciary rule is already hurting small savers. Here's how to roll it back
By Chairwoman Virginia Foxx (R-NC) and Rep. Phil Roe (R-TN)
Saving for retirement is a difficult challenge for Americans across the country. By one estimate, there are nearly 40 million working families who haven't saved a dime for retirement. It's clear the last thing Washington should do is create new barriers to the financial security Americans need when they retire.
That's why it's so mind-boggling that the Obama administration put in place a so-called fiduciary rule that makes it harder for people to build a secure retirement.
We've always agreed that retirement advisers should act in good faith; we've been saying that from the start. But a rule requiring retirement advisers to serve their clients' best interests is completely pointless if it means many Americans won't have access to retirement advice at all.
For years, the House Committee on Education and the Workforce has led the fight against this fundamentally flawed rule. We weren't the only ones who raised concerns. In fact, nearly 100 House Democrats cautioned the Obama administration against finalizing a rule that would "have a disproportionate impact on lower- and middle-income communities."
Sadly, that's precisely what the previous administration settled on. And you don't have to just take our word for it. Even former President Barack Obama's own secretary of treasury, Jack Lew, recently acknowledged the rule will lead to harmful consequences, including "pricing smaller investors out of the financial advice market."
Indeed, according to the American Action Forum, the rule could increase costs on retirement savers by $46.6 billion. Those who can least afford it will be hit the hardest. Many working families will soon find they can no longer afford personal retirement advice, and small businesses will face new obstacles as they try to set up retirement plans for their employees.
We're seeing these predictions come to fruition. Several firms have already dropped the very types of services those with limited savings are more likely to rely on, and it's only a matter of time before things get worse.
A U.S. Chamber of Commerce report notes that 71 percent of advisors surveyed will stop providing advice to some of their clients with small account balances. Perhaps most concerning, the report found that up to 7 million retirement savers may lose access to retirement advice altogether.
For these very reasons, we wish the rule had been scrapped altogether. But from Secretary of Labor Alexander Acosta's perspective, his hands were tied. That makes it even more compelling to develop a legislative solution.
To his credit, the secretary also noted that "America was founded on the belief that people should be trusted to govern themselves … Voters elect their representatives to Washington." We agree. As the People's representatives, we have a duty to fix the fiduciary mess.
Our committee recently advanced the Affordable Retirement Advice for Savers Act, which will repeal the fiduciary rule and preserve access to affordable retirement advice. It also amends federal law to require retirement advisers to act in the best interests of their clients. Legislation — not 1,000 pages of red tape — is the right way to address an issue with such a widespread impact.
This legislation proves we can hold financial advisers accountable without causing millions of Americans to lose access to affordable retirement advice. It's our hope that members of both parties will do the right thing by joining together and sending H.R. 2823 to President Trump's desk. The American people are depending on us to do just that.
Rep. Virginia Foxx, R-N.C. (@virginiafoxx), is chairwoman of the House Committee on Education and the Workforce. Rep. Phil Roe, R-Tenn. (@DrPhilRoe), a member of that same committee, also chairs the House Committee on Veterans Affairs.
To read the full op-ed in the Washington Examiner, click here.
WASHINGTON—Today, Members of the House Small Business Committee Subcommittee on Agriculture, Energy, and Trade heard from a panel of agricultural technology (agtech) and agribusiness professionals on the rapid development of agtech driven by the private sector.
“Private sector participation in agtech research and development has surged in recent years. However, the most important stakeholders in any discussion of agtech are the farmers themselves. Small and family farmers cannot risk their time and resources for experimental innovations and technologies that may not work,” said Chairman Rod Blum (R-IA). “Farmers may be budding entrepreneurs developing new technology to improve their farms, but may need some help connecting with investors and mentors to bring their ideas to market.”
Small Firms on the Frontier of Agribusiness
Entrepreneurs are tackling industry challenges and facilitating technology transfer from the lab to the farm to the table. Agricultural regions are competing to be the next great innovation hub, which has spurred rural revitalization.
“When rural entrepreneurs succeed, rural communities thrive and prosper. As entrepreneurs grow their businesses, they create jobs for their family, friends and neighbors,” said Dr. Lisa Benson, Director of Rural Development at the American Farm Bureau Federation in Washington, DC. “A hurdle many of these ag tech entrepreneurs faced was trying to access enough capital to scale up their production to reach economies of scale. To address this challenge, Farm Bureau created the Agriculture Investment Summit that connects rural entrepreneurs with investors from venture capital funds and accelerator programs.”
“Thanks to advances in on-farm technology, data science, connectivity, and remote sensing, it is possible for a wide network of farmers to actively participate in finding answers to their questions, and get paid for meaningful research through farmer trials,” stated Kevin Heikes, Co-Founder and Chief Operating Officer at IN10T in Lexena, KS. “IN10T collaborates closely with farmers, ensuring understanding of the data, and converting data into invaluable, applicable insights.”
"Farmers saw such great value in our technology that multiple vineyards and one apple orchard even agreed to allow us to run small-scale field trials and generate our first field-trial data for our technology,” said Dr. Mark Kester, Chief Scientific Officer at AgroSpheres in Charlottesville, VA. “The willingness for small farms in our community to work with us was key to the early stages of our success.”
“It is no exaggeration to say that technology in agriculture has changed more in the past 100 years than it had in any 100 years prior, and perhaps more than in all of human history combined,” said Joseph W. Guthrie, Senior Instructor for Agricultural Technology at Virginia Tech in Blacksburg, VA. “There is no question that precision agriculture is an all-important driving force in crop production now and appears that it will be even more important in the future as it is more widely adopted, as the technology will likely become more affordable, and as it continues to improve over time.”
On October, 4, 2017, the Department of Treasury announced recommended actions to withdraw, partially revoke, or revise eight regulations identified by Treasury for review under Executive Order 13789, which called for the identification of tax regulations that impose an undue burden on taxpayers.
Advocacy Report Shows Rural Entrepreneurship Has Been Declining
Looking at our markup agenda today, I’d first like to take note of the autonomous vehicles legislation. Having seen it firsthand, autonomous vehicle technology holds incredible promise for consumers and our nation overall. I am glad we were able to come to an agreement on the preemption provision that will preserve the traditional partnership between the federal government and the fifty states that has successfully protected the American driving public for over fifty years.
I am also pleased that the TSA Modernization Act is on the agenda. This legislation, among other things, expands the use of explosive detection canines, expedites deployment of security screening technology, and continues efforts to expand and promote enrollment in the TSA’s PreCheck program.
Lastly, there are five nominations before us today. Because of concerns I have with Ms. Buerkle’s renomination to the Consumer Product Safety Commission for another seven-year term, which would not start until October 2018, I have asked that it be considered separately from her nomination to be chair of the CPSC. I will address those concerns in more detail when we get to that portion of today’s markup.
With that Mr. Chairman, I turn it back to you.
Before we start today, I want to take a moment to send our thoughts and prayers to all of those impacted by Monday’s tragic events in Las Vegas. It is hard to fathom the pain caused by this senseless crime. Understandably, our Committee colleagues Senators Heller and Cortez Masto are back home in Nevada with their constituents. Our hearts are with them.
Turning to today’s agenda, we will be considering three legislative items and five nominations.
The first item on today’s agenda is a measure that Senator Peters and I have been working on for some time, the AV Start Act, which is also cosponsored by Senators Blunt and Stabenow.
Earlier this year, we released bipartisan principles that would guide our efforts to craft automated vehicle legislation. The bill before us today puts those principles into practice.
The AV START Act prioritizes safety by setting the National Highway Traffic Safety Administration, or NHTSA (Nit-suh), on an expedited path to long-term safety standards while providing new tools for near-term safety oversight.
The bill also promotes continued innovation, and reduces existing roadblocks, by enhancing NHTSA’s ability to update decades-old technology standards all at once, rather than undertaking potentially dozens of piecemeal rulemakings.
The bill maintains the traditional balance between federal and state regulators, ensuring motor vehicle safety remains the federal government’s responsibility, while states retain their important role overseeing licensing, registration, insurance, and traffic enforcement.
The AV START Act also puts cybersecurity front and center, requiring all manufacturers to minimize cybersecurity risks and keep regulators informed through a mandatory, reviewable cybersecurity plan, and through mandatory submissions to NHTSA for each new automated vehicle.
Finally, the AV START Act directs the creation of best practices and guidelines on responsible consumer education and marketing so that consumers understand the capabilities and limitations of automated vehicle systems and advanced driver assistance systems.
More than 35,000 people are killed in car crashes on our nation’s roads every year, and over 90 percent of crashes can be attributed to human error. Automated vehicles present an opportunity to make incredible gains in automobile safety.
I would like to thank Senator Peters for working so closely with me on the AV START Act and look forward to continuing to work with him, other members of this Committee, and eventually the full Senate to ensure that the federal government does not stand in the way of this potentially lifesaving technology.
The second item on today’s agenda, the bipartisan TSA Modernization Act, which I introduced with Senators Nelson, Blunt and Cantwell, builds upon security reforms enacted last year and responds to current aviation security challenges.
The legislation includes reforms of TSA’s organizational and leadership structure, provisions to advance development and acquisition of new security technologies, improvements for public area security, and pathways to minimize frustrating security delays for travelers.
I am hopeful that this bill, together with the surface security bill the Committee considered earlier this year, can be considered by the full Senate soon, perhaps even as part of a broader DHS reauthorization.
The final legislative item on the agenda, the National Suicide Hotline Improvement Act, sponsored by Senators Hatch, Baldwin, Donnelly, Heller, Sullivan, and Udall, would require the FCC to study the feasibility of designating a simple, easy-to-remember, three-digit dialing code to be used for a national suicide prevention and mental health crisis hotline system.
Tragically, suicide is an increasing problem in the United States, and the National Suicide Hotline Improvement Act would ensure that the FCC has the input of Veterans’ representatives and Mental Health professionals as it considers how best to ensure those in crisis can easily reach the help they need.
Finally, the committee will consider five well-qualified nominees.
If confirmed, they will fill a number of key vacancies – including the Chairman of the Consumer Product Safety Commission, the Administrator of the Pipeline and Hazardous Materials Safety Administration, the Administrator of the National Institute of Standards and Technology, the Administrator of the National Telecommunications and Information Administration, and the Assistant Secretary of Commerce for Oceans and Atmosphere.With that, I will turn to Senator Nelson for any opening remarks.
WASHINGTON – House Committee on Small Business Chairman Steve Chabot (R-OH) released the following statement today after the Committee on Education and the Workforce marked up and passed out of Committee H.R. 3441, the "Save Local Business Act," of which he is an original co-sponsor:
“I’m encouraged by the progress of this important bill. As I’ve mentioned before, small businesses have been hurting under this rule for more than two years. It created unnecessary confusion and burdensome challenges for job creators that just want to grow their companies. After hearing first-hand from the small businesses community how it is damaging their ability to expand, it is time to put an end to this rule,” said Chairman Chabot.
In April 2015, the Committee first held a roundtable on the emerging issue. The National Labor Relations Board (NLRB) then expanded its definition of the joint employer standard in August 2015. In March 2016, the Committee held a hearing titled, “Risky Business: Effects of New Joint Employer Standards for Small Firms” to examine the direct impact of the rule on small businesses.
The bill was also endorsed by the Small Business and Entrepreneurship Council (SBEC).
WASHINGTON—Today, Members of the House Small Business Committee heard from a panel of witnesses representing all sectors of small business on a key issue facing not only America’s 29 million small businesses, but also Congressional leaders—tax reform.
“As the discussions surrounding tax reform echo in the Capitol, it is paramount that part of the conversation involves the job creators themselves – the startups; the entrepreneurs; and the small businesses that transform Main Streets across America,” said Chairman Chabot (R-OH). “However, as the technology revolution changes business ecosystems, the tax code continues to hold small businesses back.”
A Modernized Tax Code for the Modern Day Economy
Tax reform continues to be a top priority for both small business owners and the Committee. The last time the tax code was comprehensively updated was 31 years ago. The witnesses examined how the proposed changes in H.R. 3717, the Small Business Owners’ Tax Simplification Act of 2017, could impact the nation’s job creators.
“On top of the compliance burden, our tax code has not kept pace with our changing economy. Technology has been a game changer in the way we do business, evident by the explosion of ecommerce and the sharing economy,” said Kristie Arslan, Entrepreneur-in-Residence at the Small Business & Entrepreneurship Council and owner of Popped! Republic Gourmet Popcorn in Alexandria, VA. “We believe that a pro-growth tax code is vital to reinvigorate entrepreneurship and improve the competitiveness of the U.S. economy. Our nation needs a tax code that enables small business sustainability and growth – the combined approach of tax cuts, tax reform and tax simplification will get us there."
“Small businesses create about 64% of new private sector jobs. Yet the tax code is not user-friendly for small and medium-sized companies. Like most companies with fewer than ten employees, we don’t have a department or even a person dedicated to tax filings,” stated Taylor Wyatt, President of MotionMobs in Birmingham, AL. “Making the process of paying taxes user-friendly is very important, and this legislation would be a good step in that direction.”
“In our view, what is truly exciting is that these marketplaces have given rise to a new entrepreneur, the solopreneur. By our estimates, of the 4 million listings on Airbnb worldwide, 2 million are in the United States. Lyft claims about 100,000 drivers in the U.S. market while Uber has 1.5 million drivers worldwide,” added Miguel Centeno, Partner at Shared Economy CPA in Redondo Beach, CA. “And for all the work and trust and community these entrepreneurs are building, it is my view that what they are offered in terms of tax benefits is extremely lacking.”
“Introduced as a bipartisan bill, H.R. 3717 proposes commonsense changes to better meet the needs of the growing number of sharing economy operators and self-employed small business owners,” said Caroline Bruckner, Managing Director of the Kogod Tax Policy Center at American University in Washington, DC. “H.R. 3717 provides simplification and tax relief to small businesses navigating the uncertainty of the current tax code, particularly those taxpayers who are subject to the quarterly-estimated payment rules, the Form 1099 reporting rules, and self-employed small business owners paying for their own healthcare coverage.”
I was proud to introduce the Save Local Business Act because it’s good for workers and it’s good for job creators. I appreciate the opportunity to speak in support of this commonsense proposal today.
As a former labor attorney, I can tell you it used to be pretty clear who an employer was. But now, two completely separate employers can be considered joint employers if they make a business agreement that “indirectly” or even “potentially” impacts their employees.
Those are certainly vague terms. So vague that many lawyers may not even agree on what exactly they mean. But we know the real-world impact has been confusion, uncertainty, and growing legal jeopardy.
Here’s what those terms mean to the owner of Wintzell’s Oyster House in my district in Mobile, Alabama. The owner, Bob Omainsky, wrote recently in Alabama Today:
“If we hire an outside landscaping company to keep our lawns lush, I could be considered a joint employer if I show the landscapers where to mow. Or, if I contract a food supplier for certain ingredients, I could become part of a lawsuit if one of their workers complains about overtime pay. The uncertainty is nothing more than governmental overreach that is crippling eateries like Wintzell’s and discouraging growth throughout the restaurant industry.”
There are small business owners in all of our districts who are working hard each and every day to create jobs and contribute to our local economies, and they deserve better than this. They deserve clarity.
Workers deserve better, too. They deserve better than an extreme and unworkable rule that threatens 1.7 million jobs. And they deserve better than unelected bureaucrats interfering with their relationship with their employer for the sole purpose of empowering union and trial lawyer interests.
That’s right. This joint employer scheme was really intended to make it easier for Big Labor to organize small businesses. It’s no surprise that some of the nation’s largest labor unions have been peddling scare tactics and spreading false information about H.R. 3441.
So let me be clear on what this bill does. H.R. 3441 maintains existing worker protections under the National Labor Relations Act and the Fair Labor Standards Act.
We are amending the NLRA to roll back the Browning-Ferris decision and prevent future NLRB overreach. And we are amending the FLSA because aggressive trial lawyers and activist judges have made matters even worse by creating a confusing patchwork of joint employer standards across the country.
Again, this bill does not take away a single protection from a single worker. Instead, it ensures the actual employer is legally responsible for providing those protections. If everyone is responsible, no one is.
Some have wrongly claimed that the joint employer standard reflected in H.R. 3441 is somehow a dramatic departure from long-standing policy prior to the NLRB’s 2015 ruling. That claim is quite frankly absurd.
I’d like to remind the members of this committee that it was the Browning-Ferris decision, and actions by Obama-era bureaucrats, that completely disrupted what was once a stable legal environment and threatened countless local businesses as a result.
H.R. 3441 simply restores the commonsense joint employer standard that workers and employers relied on for decades. It clarifies that two or more employers must have “actual, direct, and immediate” control over essential terms and conditions of employment to be considered joint employers.
The bill as introduced is consistent with case law prior to BFI, and today’s markup presents an opportunity to make the bill even clearer.
That’s why the substitute amendment I am offering makes clarifying and technical changes to the underlying bill. I urge all members to support the substitute, as well as H.R. 3441.
To read PDF version, click here.
Opening Statement by Chairwoman Virginia Foxx (R-AL): Markup of H.R. 3441, the Save Local Business Act
Today, the committee will consider H.R. 3441, the Save Local Business Act. Since the National Labor Relations Board unilaterally redefined what it means to be an employer in 2015, more than two dozen witnesses have come before this committee and others in Congress to tell us, in practical terms, what the decision means for the future of American jobs.
We’ve heard firsthand how the board’s decision, and the actions of regulators and activist judges that followed, have disrupted the daily operations of business owners across the country.
The consequences have been far-reaching. Basic, business-to-business relationships that have long been a part of the American way of life and a critical component to the success of our economy have been called into question.
The lines of responsibility for important worker protections are now blurry. Small business owners fear they will lose the independence they worked so hard to achieve. Others who rely on contracting opportunities fear their options for growth, along with their limited stream of revenue, will suddenly diminish.
Meanwhile, many hardworking men and women are left wondering why the relationship they have with their employer is changing, or if unelected bureaucrats or activist judges will dictate that they have a new boss at some distant company.
And that’s not all. While we’ve all been working together here in Congress to support workforce development reforms, we’ve simultaneously heard how the joint employer scheme makes it harder for employers effectively to do their part in addressing our nation’s skills gap.
All of this damage began with one extreme and obstructive ruling. We wouldn’t be here today if the overwhelming consensus wasn’t that the NLRB and Obama-era bureaucrats made serious mistakes.
We’re here today to complete one of the most important steps in correcting those mistakes. Mr. Byrne has introduced the Save Local Business Act with the support of most of the members of this committee.
The bill directly addresses the mistakes the NLRB made when it redefined the concept of joint employment and put so many jobs and livelihoods at risk. And it addresses the mistakes the Obama administration made when it spread the board’s flawed policy to other areas of federal labor law.
Both of our workforce subcommittee chairmen, Mr. Byrne and Mr. Walberg, have carefully examined the statutes under their respective jurisdictions. They worked together to ensure that the scope of the bill under consideration today appropriately clears up the existing confusion and restores the commonsense concept of joint employer for businesses of every size.
American workers deserve to know who they’re dealing with in their workplaces. They should have the power to speak for themselves on matters of pay, schedules, professional development — anything that helps them have the successful life they want for themselves.
In order to do that, they need to know with certainty who their employer is. But both employers and employees have made clear to this committee that the current joint employer standard is confusing at best, devastating at worst, and simply not sustainable.
We have heard them, and that’s what leads us to where we are today. I thank Mr. Byrne for his hard work bringing the Save Local Business Act this far, and I thank all of our members for being here and for ensuring the joint employer problem and this solution get the thorough attention they deserve.
To read PDF version, click here.
WASHINGTON – U.S. Sen. John Thune (R-S.D.), who serves as chairman of the Senate Committee on Commerce, Science, and Transportation, together with Sen. Ed Markey (D-MA), today sent a letter to Federal Communications Commission (FCC) Chairman Ajit Pai. The letter encourages the commission to continue with a rulemaking that creates and makes available a comprehensive database of reassigned telephone numbers in an effort to provide consumers and businesses with relief from robocalling and robotexts and to provide those calling in good faith a means of avoiding liability for unknowingly violating the Telephone Consumer Protection Act.
Excerpt from the letter to the FCC:
“Periodically, consumers receive unwanted robocalls and robotexts because the previous holder, not the current holder, of the phone number provided consent. Not only are these calls and texts to reassigned numbers a nuisance to consumers, but they also create liabilities for calling parties because more than one call or text to a reassigned number may be a violation of the Telephone Consumer Protection Act (TCPA). Many of our constituents complain about receiving these intrusive and unsolicited calls and texts that violate the rights of privacy and control created by the TCPA. We have also heard from hospitals, small businesses, and other stakeholders in our states who exercise care in their efforts to contact their patients, customers, or employees, but who nonetheless could face liability under the TCPA because they are alleged to have called reassigned numbers.”
The Commerce Committee exercises jurisdiction over the FCC.
Click here for a copy of the full letter to FCC Chairman Ajit Pai.
WASHINGTON – U.S. Sen. Maggie Hassan (D-N.H.) will convene a field hearing titled, “Expanding Broadband Infrastructure in the Granite State,” on Friday October 13, 2017, at 10:00 a.m. in Keene, New Hampshire. The hearing will examine the deployment of broadband infrastructure, especially in rural areas.
Witnesses:- The Honorable Jessica Rosenworcel, Commissioner, Federal Communications Commission (FCC)
- Mr. Joshua Cyr, Director, Education and Acceleration, Alpha Loft
- Mr. Mike Reed, State President, Consolidated Communications
- Mr. Brian Shepperd, Director Broadband Services, University of New Hampshire
- Mr. Grant Spellmyer, Vice President – Federal Affairs & Public Policy, US Cellular
- Mr. Tom Strickland, President & Co-Owner, Sequoya Technologies
* Witness list subject to change
Friday, October 13, 2017
10:00 a.m. EDT
Keene State College
Centennial Hall Alumni Center
229 Main St.
Advocacy to Host Regulatory Roundtable in Glen Allen, Virginia
Mitch Tyner Appointed Senior Advisor/Director of Regional Affairs