According to a new story in the Wall Street Journal, holdovers from the Obama administration are in a state of mutiny in the Department of Labor. After trying their damnedest to keep President Trump’s original nominee for Labor Secretary, Carl’s Jr. CEO Andy Puzder, from getting the job – an effort that was ultimately successful – these leftover Democrats are now openly fighting the Trump agenda.
The central problem stems from one of Trump’s early executive orders, which instructed the Labor Department to review the fiduciary rule. Trump sent a memo to the agency, directing them to examine the rule, which is intended to regulate how an investment broker can act on behalf of a client. The broker must act in the best interests of the customer, essentially. Now, this seems like the kind of law that would be nice to have on the books, but conservatives argue that it actually keeps many Americans from getting the best possible financial services.
In the memo, Trump instructed Labor officials to see whether the “anticipated applicability of the Fiduciary Duty Rule has harmed or is likely to harm investors due to a reduction of Americans’ access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice.”
The Journal reports that this directive is responsible for much of the mutiny within the Labor Department. And if there needed to be an extra partisan spin on the issue, the rule itself was championed by Obama’s Secretary of Labor Tom Perez, who now happens to be the chairman of the Democratic National Committee. So while it might seem strange that this is where Obama loyalists are drawing a line in the sand, Perez’s involvement is probably the key to that particular puzzle.
On the small end of the scale, this rule is only going to force investment banks to shut down certain retirement packages open to the average customer. They aren’t going to keep these investment options open on a nonprofit basis; they’ll just simply stop offering the options altogether. This rule, therefore, doesn’t take all the crooks off the market, as Democrats say. It just takes everyone off the market, meaning that many Americans will no longer have access to the kind of retirement advice they need.
On the larger end of the scale, of course, this is about Trump getting full control of his administration. That means getting rid of the old wood and putting in new wood, to quote John Goodman. And there’s no time like the present.