House Republicans are proposing a budget bill that would repeal Department of Labor rules
Republicans in the U.S. House of Representatives have proposed a Department of Labor budget that would block the Department of Labor’s final rule on environmental, social and governance considerations in retirement plans and a proposed rule that would revise the definition of independent contractor. The GOP is also considering amendments to the bill — H.R. 5894, the Labor, Health, Human Services, Education, and Related Agencies Act of 2024 — that would block proposed changes to the definition of fiduciary, but those amendments will likely come to a vote on Wednesday. .
The ongoing decision to finance the government currently expires at the end of Friday. There is unlikely to be enough time to pass a full 2024 budget by then, and Congress is separately debating another continuing resolution to keep the government open until January.
The main text of the legislation would prevent the Department of Labor from implementing the ESG Final Fiduciary Rule, which allows plans to consider ESG factors in selecting a retirement plan’s eligible investment, and from finalizing an October 2022 proposal that would amend the definition of independent contractor. The latter would make it easier for a worker to be classified as an employee and make workers less likely to be classified as independent contractors.
The White House vocally opposed both measures and announced that President Joe Biden would veto the bill if it reached his desk; On March 20, Biden vetoed an earlier attempt by Congress to repeal the ESG fiduciary rule through the Congressional Review Act.
Republicans also proposed amendments to HR 5894 that would block a new retirement security proposal that redefines the terms of being a fiduciary to include one-time recommendations, including plan renewals and annuity sales. These amendments have not yet been voted on, as of the date of publication.
The three amendments were proposed by Rick Allen, Republican of Georgia, Ann Wagner, Republican of Missouri, and Ralph Norman, Republican of South Carolina. The amendments will prevent changes to the definition of fiduciary advisor and related PTE changes proposed by the Employee Benefits Security Administration on October 31. It would also prevent EBSA from issuing a substantially similar proposal in 2024.
The budget proposal allocates $152.88 million to ecologically or biologically important marine areas, another item the White House opposes. The White House statement indicated that this amount is not consistent with the budget agreement reached between Biden and former House Speaker Kevin McCarthy, Republican of California, in May, when the Fiscal Responsibility Act was passed.
EBSA is funded with $233.87 million in 2023. The Senate Appropriations Committee, controlled by Democrats, planned to fund EBSA with $249 million for 2024, based on a funding bill the committee passed in July on a 25-1 vote.
Neither the bill nor the amendments have been voted on, but H.R. 5894 will likely pass the House in some form in the coming days. The Senate is unlikely to approve the bill in its current form, and the White House has already announced its intention to veto it.