U.S. House of Representatives Committee on Education and Labor
06/27/2024 | News release | Distributed by Public on 06/27/2024 16:22
Hearing Recap: EBSA Edition
Today's Health, Employment, Labor, and Pensions Subcommittee hearing examined the actions of the Employee Benefits Security Administration (EBSA) under EBSA chief Lisa Gomez.
Under Assistant Secretary Gomez, costly EBSA rules are burdening American workers and retirees. The expensive regulations include-but are not limited to-a woke investment rule, an expansive fiduciary rule, and myriad stifling health care mandates.
These rules govern the options, affordability, and access to 2.8 million health plans and 765,000 retirement plans for tens of millions of Americans. In his opening statement, Chairman Bob Good (R-VA) underscored the weight of Ms. Gomez's determinations, stating, "It's safe to say, Ms. Gomez, that with the financial security of around half of America in your hands, you are one of Washington's most important bureaucrats."
Turning to questions, Rep. Tim Walberg (R-MI) opened with concerns about the unusually rushed fiduciary rule. The rule, which will broaden the definition of fiduciary and limit the retirement advice available to retirees, allowed for very little public engagement in the comment period. Also concerning, it is a near direct rewrite of an Obama-era rule that was invalidated in the courts.
"Is it your position that the public engagement during the 2016 fiduciary rulemaking allowed DOL to write a rule eight years later without robust engagement?" asked Rep. Walberg.
Ms. Gomez stalled, so he pressed with the same question: "Did you and do you believe that the 2024 final rule is similar enough to the 2016 rule to shorten the process? Because it was shortened."
Ms. Gomez responded by claiming that "we made various changes to the final rule" in response to feedback from stakeholders, but she neglected to provide evidence or answer the substance of Rep. Walberg's question. Why not give the public more time to comment on the proposed rule?
Moving on, Chairwoman Virginia Foxx (R-NC) voiced her objection to the administration's recent attack on the Employee Retirement Income Security Act of 1974 (ERISA). ERISA preemption, as Foxx mentioned, is the "lynchpin of multi-state health plans." Moreover, it is the foundational law that EBSA is responsible for enforcing.
Chairwoman. Foxx asked, "Will you commit to defending strong ERISA preemption moving forward?"
"Congresswoman, I can commit to working together…" replied Ms. Gomez, trailing off and failing to commit in a meaningful way to defend ERISA preemption.
Rep. Rick Allen (R-GA) shifted the conversation to Environmental, Social, and Governance (ESG) investing concerns, asking, "Why does the DOL continue to blatantly ignore ERISA and the Supreme Court ruling by allowing financial advisors to invest Americans' retirement savings into ESG funds which are proven to create higher risk?"
Her response: "In that rule we were crystal clear that fiduciaries may not subordinate the interests of participants and beneficiaries in their financial plan benefits to any other objectives. They may not sacrifice individual return or take additional investment risk or promote other goals that are unrelated to the interests of participants and beneficiaries."
In light of the risky nature of ESG investments, Rep. Allen summed up Gomez's own mixed messaging with one word: confusion. If return is the superordinate concern and ESG funds are demonstrably worse at providing return, what is the need for the Biden rule?
Rep. Eric Burlison (R-MO) also attacked the politicization of investment funds under Ms. Gomez's tenure from a different angle. The White House hosted an event with leaders representing major pension funds subject to EBSA oversight. According to the Washington Post, the White House was able to secure pro-union commitments from these leaders.
Rightly concerned that, again, pension fund managers are shirking their fiduciary duty by making partisan investments, Rep. Burlison asked, "What are you doing to prevent the improper use of pension funds such as what the White House is doing to basically politicize these retirees' funds?"
Again, she responded with the same canned answer about her ESG rule not superseding a fiduciary's duty to return on investment. Again, Rep. Burlison reiterated, "I find it puzzling that you would even need to do that."
Though there were perhaps more questions raised than answers given, the hearing shed light on the politicization of yet another government agency under President Joe Biden's leadership. The hearing ended on a note from Chairman Good: "Your agency certainly has its work cut out for it, and this Committee will do everything possible to hold you accountable."
Bottom line: American beneficiaries can be confident that the Committee is in their corner, proudly advocating for their bottom line.
These rules govern the options, affordability, and access to 2.8 million health plans and 765,000 retirement plans for tens of millions of Americans. In his opening statement, Chairman Bob Good (R-VA) underscored the weight of Ms. Gomez's determinations, stating, "It's safe to say, Ms. Gomez, that with the financial security of around half of America in your hands, you are one of Washington's most important bureaucrats."
Turning to questions, Rep. Tim Walberg (R-MI) opened with concerns about the unusually rushed fiduciary rule. The rule, which will broaden the definition of fiduciary and limit the retirement advice available to retirees, allowed for very little public engagement in the comment period. Also concerning, it is a near direct rewrite of an Obama-era rule that was invalidated in the courts.
"Is it your position that the public engagement during the 2016 fiduciary rulemaking allowed DOL to write a rule eight years later without robust engagement?" asked Rep. Walberg.
Ms. Gomez stalled, so he pressed with the same question: "Did you and do you believe that the 2024 final rule is similar enough to the 2016 rule to shorten the process? Because it was shortened."
Ms. Gomez responded by claiming that "we made various changes to the final rule" in response to feedback from stakeholders, but she neglected to provide evidence or answer the substance of Rep. Walberg's question. Why not give the public more time to comment on the proposed rule?
Moving on, Chairwoman Virginia Foxx (R-NC) voiced her objection to the administration's recent attack on the Employee Retirement Income Security Act of 1974 (ERISA). ERISA preemption, as Foxx mentioned, is the "lynchpin of multi-state health plans." Moreover, it is the foundational law that EBSA is responsible for enforcing.
Chairwoman. Foxx asked, "Will you commit to defending strong ERISA preemption moving forward?"
"Congresswoman, I can commit to working together…" replied Ms. Gomez, trailing off and failing to commit in a meaningful way to defend ERISA preemption.
Rep. Rick Allen (R-GA) shifted the conversation to Environmental, Social, and Governance (ESG) investing concerns, asking, "Why does the DOL continue to blatantly ignore ERISA and the Supreme Court ruling by allowing financial advisors to invest Americans' retirement savings into ESG funds which are proven to create higher risk?"
Her response: "In that rule we were crystal clear that fiduciaries may not subordinate the interests of participants and beneficiaries in their financial plan benefits to any other objectives. They may not sacrifice individual return or take additional investment risk or promote other goals that are unrelated to the interests of participants and beneficiaries."
In light of the risky nature of ESG investments, Rep. Allen summed up Gomez's own mixed messaging with one word: confusion. If return is the superordinate concern and ESG funds are demonstrably worse at providing return, what is the need for the Biden rule?
Rep. Eric Burlison (R-MO) also attacked the politicization of investment funds under Ms. Gomez's tenure from a different angle. The White House hosted an event with leaders representing major pension funds subject to EBSA oversight. According to the Washington Post, the White House was able to secure pro-union commitments from these leaders.
Again, she responded with the same canned answer about her ESG rule not superseding a fiduciary's duty to return on investment. Again, Rep. Burlison reiterated, "I find it puzzling that you would even need to do that."
Though there were perhaps more questions raised than answers given, the hearing shed light on the politicization of yet another government agency under President Joe Biden's leadership. The hearing ended on a note from Chairman Good: "Your agency certainly has its work cut out for it, and this Committee will do everything possible to hold you accountable."
Bottom line: American beneficiaries can be confident that the Committee is in their corner, proudly advocating for their bottom line.