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For Immediate Release
March, 17 2017, 02:45pm EDT
Contact:
Phone: (202) 775-8810
Trump Delay of the 'Fiduciary Rule' Will Cost Retirement Savers $3.7 Billion
WASHINGTON
Today, Economic Policy Institute Senior Economist and Director of Policy Heidi Shierholz submitted a comment opposing the proposed delay of the Department of Labor's "fiduciary rule," which requires financial professionals to act in their clients' best interests when recommending investment products or strategies to people saving for retirement. Perhaps surprisingly, it is currently legal in many cases for financial professionals to recommend higher-cost investment products that provide them with a higher commission but provide lower returns to their clients. The fiduciary rule would eliminate this conflict of interest.
Following a directive from President Trump, DOL proposed a two-month delay in implementing the rule. This delay will be enormously expensive to retirement savers--and not just during the period of the delay. As DOL itself notes, the losses that retirement savers experience from being steered towards higher-cost investment products during the delay "would not be recovered, and would continue to compound, as the accumulated losses would have reduced the asset based that is available later for reinvestment or spending."
Every seven days that the rule's implementation is delayed will cost retirement savers $431 million over the next 30 years. All told, the proposed 60-day delay will cost workers saving for retirement $3.7 billion.
"People who have worked hard to save for retirement need and deserve this common sense protection, which most people are shocked to discover isn't already the case," said Shierholz. "The only beneficiary of President Trump's move to delay this rule is the financial industry, which wants to continue fleecing retirement savers for as long as possible."
The Trump administration claims that delaying the rule will give it time to determine whether the rule would adversely affect the ability of Americans to gain access to retirement advice. This is a thinly-veiled tactic to kill the rule and allow the financial industry to continue taking advantage of retirement savers.
As part of the initial rulemaking process, DOL prepared a 382 page cost-benefit analysis examining in detail the expected economic impact of the rule. This was the culmination of a roughly six-year process that incorporated the feedback from four days of hearings, more than 100 stakeholder meetings, and thousands of public comments. Delaying the rule to revisit questions that have already been so thoroughly investigated is irresponsible and unjustifiable.
Conflicts of interest in retirement advice cost American families $17 billion a year. Delaying the fiduciary rule will simply mean business as usual as Wall Street firms continue to take advantage of working people.
EPI is an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. EPI's research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans.
(202) 775-8810LATEST NEWS
Dr. Oz Nomination Seen as Potential Boon for Medicare Privatization
"Dr. Oz wants to fully privatize Medicare," warned one advocacy group. "That’s why Donald Trump put him in charge of Medicare."
Nov 20, 2024
Dr. Mehmet Oz, whose unsuccessful 2022 Pennsylvania Senate bid included pitching voters on a plan to expand the privatized Medicare Advantage program, is now in a position to potentially actualize that plan.
President-elect Donald Trump announced Tuesday that Oz, also known by his TV personality name Dr. Oz, is his pick to lead the Centers for Medicare and Medicaid Services (CMS).
"Dr. Oz—a massive investor in Pharma—told the voters of Pennsylvania his plans to privatize Medicare… and they rejected him. Now Trump is giving him the authority to see his industry-approved plan carried through," wrote the progressive-leaning outlet The Lever, which covered Oz's support for Medicare Advantage back in 2022.
Through Medicare Advantage, which has been promoted by Trump and other congressional Republicans, seniors can opt out of traditional government-run Medicare health plans and instead choose plans administered by private insurers, such as UnitedHealthcare and Cigna.
According to The Lever's 2022 reporting, Oz pushed Medicare Advantage plans on his show The Dr. Oz Show and co-wrote a 2020 column for Forbes with a former healthcare executive in which they argued that a "Medicare Advantage For All" plan can "save" our healthcare system. In the column, Oz and his co-author articulated a plan to expand Medicare Advantage by imposing a 20% payroll tax.
Oz "is not a good pick for a very powerful position in charge of a trillion dollars of healthcare spending," wrote Matt Stoller of the American Economic Liberties Project on X, in reference to The Lever's investigation.
The Lever also reported that Oz's plan to expand private plans under Medicare Advantage could "boost companies in which he invests." For example, Oz and his wife owned up to $550,000 worth of stock in UnitedHealth Group, at the time of reporting. UnitedHealthcare and Humana account for nearly half, or 47%, of Medicare Advantage enrollees nationwide, according to the health policy organization KFF.
Additionally, a 2022 investigation by The New York Timesfound that major health insurers have exploited Medicare Advantage to boost their profits by billions of dollars.
Project 2025, a list of right-wing policy proposals led by the Heritage Foundation that Trump has tried to distance himself from, calls for making Medicare Advantage the default option for Medicare beneficiaries, which, if enacted, "would be a multibillion-dollar annual giveaway to corporations at the expense of Medicare enrollees and taxpayers," according to the liberal research and advocacy organization the Center for American Progress.
Robert Weissman, co-president of Public Citizen, offered a related critique of Oz: Americans "need someone who will crack down on insurers who want to deny care to the sick, providers who skimp on quality healthcare, corporations that want to privatize Medicare, and Big Pharma profiteers and ideologues who want to slash Medicaid and refuse care to low-income people. What they do not need is a healthcare huckster, which unfortunately Dr. Mehmet Oz appears to have become, having spent much of his recent career hawking products of dubious medical value."
In addition to the potential boon for private insurers, some researchers, news outlets, and members of Congress have also raised concerns about the quality of care administered under Medicare Advantage.
A 2022 government report found that "[Medicare Advantage Organizations] sometimes delayed or denied Medicare Advantage beneficiaries' access to services, even though the requests met Medicare coverage rules" and also "denied payments to providers for some services that met both Medicare coverage rules and [Medicare Advantage Organization] billing rules."
In October, a group of three senators wrote to the current CMS administrator about increasingly widespread abuses and care denials by for-profit Medicare Advantage insurers.
"We are concerned that in many instances MA plans are failing to deliver, compromising timely access to care, and undermining the ability of seniors and Americans with disabilities to purchase the coverage that’s right for them," Sen. Ron Wyden (D-Ore.), Rep. Frank Pallone Jr. (D-N.J.), and Rep. Richard Neal (D-Mass.) wrote in a letter.
"We continue to hear alarming reports from seniors and their families, beneficiary advocates, and healthcare providers that MA plans are falling short, and finding a good plan is too difficult," they wrote.
In particular, they pointed to Medicare Advantage plans' growing reliance on prior authorization, a complex, barrier-ridden process whereby doctors must demonstrate a proposed treatment is medically necessary before the insurer will cover it.
"Overuse of prior authorization is not only harmful to patients, it hinders healthcare providers' ability to offer best-in-class service," they added.
Social Security Works, a progressive advocacy group, warned in a social media post Tuesday that "Dr. Oz wants to fully privatize Medicare."
"That's why Donald Trump put him in charge of Medicare," the group added. "We will fight to stop this charlatan from getting anywhere near our Medicare system."
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In 14-1 UN Security Council Vote, Lone US Veto Kills Gaza Cease-Fire Resolution
The U.S. government, said one human rights lawyer, "proves once again to the world that it is fully committed to the continuation of the genocide in Palestine."
Nov 20, 2024
The Biden administration faced fierce criticism on Wednesday after using its veto power at the United Nations Security Council to block a resolution demanding an immediate, unconditional, and permanent cease-fire in Israel's assault on the Gaza Strip.
The vetoed measure also called for all parties to implement a U.N. Security Council (UNSC) resolution passed in June—which would lead to the release of all hostages—and to enable Gaza civilians' immediate access to basic services and humanitarian assistance.
Jess Peake, who directs the International and Comparative Law Program at the University of California, Los Angeles, condemned the U.S. decision as "absolutely unforgivable" while Nina Turner, a senior fellow at the Institute on Race, Power, and Political Economy, declared that "this is absurd."
Mai El-Sadany, executive director of the Tahrir Institute for Middle East Policy in Washington, D.C., called it "yet another shameful abuse of the UNSC veto by the U.S. to perpetuate a war that violates U.S. law and U.S. international legal commitments."
"Today's message is clear to the Israeli occupying power—you may continue your genocide... with complete impunity."
Human rights attorney Craig Mokhiber, who last year resigned as the New York director for the Office of the High Commissioner for Human Rights over the United Nations' response to Gaza, said Wednesday that "the U.S. has just vetoed another cease-fire resolution in the U.N. Security Council, and, in doing so, proves once again to the world that it is fully committed to the continuation of the genocide in Palestine."
Mokhiber also called for action at the United Nations General Assembly (UNGA), where there is no U.S. veto power.
"Even as we seek accountability for Israeli perpetrators, we must also seek accountability for complicit U.S. actors," he said. "Israeli/U.S. impunity threatens the entire world. And the U.N. must now move to take concrete action in the UNGA."
The 14-1 vote at the UNSC marked the fourth time the United States has blocked a Gaza resolution since Israel began its retaliation for the Hamas-led October 7, 2023 attack. All five permanent members of the Security Council—the U.S., the United Kingdom, Russia, France, and China—have veto power. The other seats are filled on a rotating basis and lack that authority.
The 10 nonpermanent members—Algeria, Ecuador, Guyana, Japan, Malta, Mozambique, Sierra Leone, Slovenia, South Korea, and Switzerland—were behind the push to pass this draft resolution. Those who supported it represent "the collective will" of the international community, Algerian Ambassador Amar Bendjama said after the vote, according toU.N. News.
"It is sad day for the Security Council, for the United Nations, and the international community as a whole," Bendjama said, stressing that it has been "five months since the adoption of Resolution 2735, five months during which the Security Council remained idle—remained hand-tied."
"Today's message is clear to the Israeli occupying power—you may continue your genocide... with complete impunity. In this chamber—you enjoy immunity," he added. "To the Palestinian people, another clear message—while the overwhelming majority of the world stands in solidarity with your plight, others remain indifferent to your suffering."
Israel faces a South Africa-led genocide case at the International Court of Justice over its assault on Gaza, which as of Wednesday has killed at least 43,985 Palestinians, according to local officials. Another 104,092 people have been wounded, and most of the enclave's 2.3 million residents have been repeatedly displaced as Israeli forces have devastated civilian infrastructure.
U.S. Ambassador Robert Wood said Wednesday that "we made clear throughout negotiations we could not support an unconditional cease-fire that failed to release the hostages."
"This resolution abandoned that necessity," he argued. "For that reason, the United States could not support it."
The U.S. government has been widely accused of complicity in genocide for arming Israeli forces over the past 13 months—including by progressives in Congress. Sen. Bernie Sanders (I-Vt.) on Wednesday planned to force a vote on resolutions that would block American weapons sales to Israel on the grounds that they violate federal law.
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Trump Nomination of Crypto Banker Howard Lutnick Another 'Win for the Billionaire Class'
"Just another reminder that Trump serves the oligarchy, not the people," said former Labor Secretary Robert Reich.
Nov 20, 2024
Consumer advocacy group Public Citizen feigned surprise on Wednesday over President-elect Donald Trump's nomination of Wall Street CEO Howard Lutnick to lead the U.S. Department of Commerce.
"Oh look, another billionaire has made his way into Trump's Cabinet," said the group, noting Lutnick is also a promoter of cryptocurrency and a Trump megadonor. "The conflicts of interest are almost too many to count."
Among the conflicts are Lutnick's involvement in the crypto industry and federal and state cases against Cantor Fitzgerald.
In addition to running the Wall Street firm, Lutnick is a banker for the "stablecoin" company Tether; purchasers receive a Tether token for $1, with the proceeds invested in reserves and Treasury bonds managed by Lutnick's Cantor Fitzgerald.
As Public Citizen noted, New York Attorney General Letitia James found in 2021 that Tether and another crypto firm "recklessly and unlawfully covered up massive financial losses to keep their scheme going and protect their bottom lines."
The company is also reportedly under federal investigation over alleged criminal violations of anti-money laundering rules and sanctions.
Public Citizen also said that while co-chairing Trump's transition team, Lutnick "may also have helped arrange a meeting between Trump and Coinbase chief Brian Armstrong," who "helped steer a record amount of political spending from the crypto industry into the 2024 election."
Crypto firms poured over $119 million into directly influencing the 2024 federal elections, Public Citizen found in August, making the industry's spending second only to that of fossil fuel companies.
As Politico reported in October, even other members of Trump's inner circle have accused Lutnick of using his transition team co-chair position to take meetings on Capitol Hill and "talk about matters impacting his investment firm, Cantor Fitzgerald—including high-stakes regulatory matters involving its cryptocurrency business."
Lutnick's nomination, said former Labor Secretary Robert Reich, serves as a reminder that "Trump serves the oligarchy, not the people."
"Debris from crypto's political spending tsunami will jam up more halls in Washington than ever before if Lutnick is confirmed as secretary of commerce," said Bartlett Naylor, a financial policy advocate for Public Citizen. "The president-elect, who once correctly called bitcoin a scam, now surrounds himself with even more crypto enablers. Cryptocurrency won't return good jobs to the heartland or reduce food prices; it will only thin the wallets of those vulnerable to a now government-legitimized con."
Government watchdog Accountable.US pointed to more than $19 million in political donations Lutnick has made since 2009, nearly all of which went to GOP candidates and political action committees. He contributed $6 million to Trump's super PAC, Make America Great Again, Inc., in 2024 alone.
"Howard Lutnick's questionable qualifications to lead the Department of Commerce begin and end with his loyalty to the president-elect," said Accountable.US executive director Tony Carrk.
Tether isn't the only Lutnick-linked company that's been investigated for wrongdoing. The Securities and Exchange Commission fined Cantor Fitzgerald $1.4 million in 2023, saying the company repeatedly failed "to identify and report customers who qualified as large traders." The company also agreed to pay $16 million in fines to the SEC and the Commodity Futures Trading Commission in 2022 for using unauthorized communication channels.
Should Lutnick be confirmed as commerce secretary, Accountable.US said a "major regulatory conflict" could arise due to a dispute between the BGC Group, a spin-off brokerage of Cantor Fitzegerald, and futures and commodities exchange CME Group, over a competing trading platform BGC Group is launching.
"Lutnick's company's violations resulting in financial regulator fines and millions in right-wing political donations shows that political devotion takes precedence over actual experience to do the job in Trump's Cabinet," said Carrk.
Trump campaigned as a champion of working people as he railed against high grocery prices. As The New Republicreported on Tuesday, Lutnick has showered Trump's plan for across-the-board tariffs with effusive praise—even as leading economists warn the plan to impose tariffs on foreign imports will pass higher costs onto consumers, not foreign countries.
"In September, Lutnick told CNBC that 'tariffs are an amazing tool for the president to use—we need to protect the American worker,'" wrote Edith Olmsted. "Lutnick also gushed about tariffs at Trump's fascistic rally in Madison Square Garden last month, claiming that America was better off 100 years ago, when it had 'no income tax and all we had was tariffs.' His high praise for tariffs came even as he admitted Americans would face higher prices as a direct result."
Lutnick's nomination, said Sen. Elizabeth Warren (D-Mass.), "is a win for the billionaire class at the expense of working people."
"The across-the-board tariff plan," she said, "is a distraction from the MAGA scam to extend tax giveaways for giant corporations and billionaires like Howard Lutnick."
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