WASHINGTON — Sen. Ron Johnson (R-Wis.), chairman of the Senate Homeland Security and Governmental Affairs Committee, sent a letter on Friday to Office of Management and Budget (OMB) Director Shaun Donovan and Office of Information and Regulatory Affairs (OIRA) Administrator Howard Shelanski regarding the OIRA’s review of the Labor Department’s fiduciary rule. In the letter, Johnson urged the OIRA to uphold its regulatory review obligations and to enforce the stringent standards for the regulatory process as set by multiple executive orders. Johnson urged the OIRA to return the rule to the Labor Department if the Labor Department did not remedy the deficiencies in the proposed rule that was released in April 2015.
“The Labor Department’s rule is complex and overly burdensome and would harm low- and middle-income investors by raising the price of investment advice,” Johnson said. “I hope the Office of Management and Budget thoroughly reviews the rule and does not rubber-stamp this regulatory overreach by the Obama Labor Department.”
Johnson released a staff report in February 2016 that found that the Labor Department’s proposed rule did not comply with the requirements of Executive Orders 12866 and 13563. From documents produced to the committee, Johnson found that the Labor Department failed to conduct a quantitative analysis of alternatives to the rule and did not adequately incorporate advice from other government experts at the Securities and Exchange Commission and Treasury Department. The documents show that the Labor Department sought to “build the case for why the rule is necessary” by identifying data that can be woven together “to demonstrate that there is a market failure and to monetize the potential benefits of fixing it.”