Issues / Legislation » Legislative Weekly Reports

Week Ending April 29, 2016

House Strikes Down Retirement Savers Best Interest Rule

The House voted 234 to 183 along party lines to approve the GOP-sponsored Congressional Review Act (CRA) Resolution of Disapproval (H.J. Res. 88), which would overturn the Department of Labor’s (DOL) recently issued final rule protecting retirement savers’ best interest.  No Democrats voted to approve this harmful Resolution and all 234 voting Republicans supported passage and overturning DOL’s rule.

The DOL’s recently issued “Retirement Savers Best Interest” final rule requires retirement investment advisors to provide advice in their clients’ best interest.  This will protect AFSCME members and tens of millions of other retirement savers by prohibiting advisors from giving advice that reflects their own financial interests and by providing strong federal legal protections that ensure savers receive “best interest” advice.  This will reduce excessive fees, risks, and investments in assets with expected poor performance.  The White House Council of Economic Advisors has reported that the current conflicted investment advice costs retirees $17 billion in annual losses. Over a 35 year period, this could result in an individual saver losing almost 25% of their assets.

The CRA resolution has the force of law and would strike down the DOL’s entire rule. Its approval requires a simple majority in both the House and Senate, and requires President Obama’s signature to become law.  The White House’s Statement of Administration Policy (SAP) declared: “It is essential that these critical protections go into effect. If the President were presented with H.J. Res. 88, he would veto the bill.”  A veto override is highly unlikely, so the Resolution is not expected to affect the DOL’s final rule.

AFSCME and our allies oppose this Resolution and our letter of opposition can be viewed at: AFSCME strongly advocated for retirement advice protections for many years and is a founding member of the Save Our Retirement (SOR) coalition, which will work to ensure the DOL’s rule is implemented. The timing for Senate action is uncertain.  AFSCME will continue to oppose efforts in Congress to block, delay, defund, or otherwise weaken these new protections.   

Senate Panel Advances Bill With Aid to Flint

On Thursday, the Senate Environment and Public Works Committee passed and sent to the Senate floor a renewal of the Water Resources Development Act (WRDA) of 2016, including aid to Flint, with a near-unanimous vote of 19 to 1. The legislation (S. 2848) includes the bipartisan aid package to ameliorate the Flint water crisis championed by Sens. Debbie Stabenow (D-MI) and Gary Peters (D-MI).  That package had previously been attached to the Energy-Water funding bill, but stalled due to an objection by Sen. Mike Lee (R-UT). The Flint deal includes $100 million in direct grants to the city, and opens up a $70 million loan program for infrastructure investments nationwide. The WRDA legislation overall makes much-needed investments in the Clean Water and Safe Drinking Water State Revolving Funds – $1.5 billion over five years – as well as another $300 million for lead reduction training and education, and $100 million for lead testing in child care and schools. The WRDA package now moves to the full Senate, where it will be voted on after next week’s recess.  

No Congressional Action Yet on Puerto Rico Debt Crisis

Congress adjourned without taking action on any assistance to Puerto Rico, which faces a catastrophic $70 billion debt crisis. There is a May 1 deadline on a $422 million debt payment due from Puerto Rico’s Government Development Bank, and a much larger $2 billion debt payment due on July 1. House Speaker Paul Ryan (R-WI) late last year had said he hoped Congress would address this crisis in the first quarter of the New Year. But, now, House Majority Leader Kevin McCarthy (R-CA) said the House is unlikely to move on Puerto Rico before July 1. House leaders have yet to come to an agreement on any plan to restructure Puerto Rico’s debt. A proposed debt restructuring package was scheduled for action by the House Natural Resources Committee, but it was postponed. AFSCME has joined with several other labor organizations, including SEIU, UAW and AFL-CIO, to lobby for federal action that protects pensions, ensures any oversight mechanism preserves the democratic rights of the people of Puerto Rico, and includes participation of individuals who are representative of the people on the island, and does not undermine worker protections such as minimum wage and overtime. Further, fiscal stimulus is needed to strengthen Puerto Rico’s economy.  AFSCME President Lee Saunders and SEIU President Mary Kay Henry also met with Democratic Leader Nancy Pelosi (D-CA) and other House Democratic members to discuss prospects for House action and the need to protect pensions and other issues.



The average pension paid to Puerto Rico’s retirees is $12,500. But these retirees may see their benefits cut by 70 to 80% under a plan drafted in Congress to address the fiscal crisis in Puerto Rico. The plan puts hedge funds and Wall Street creditors ahead of retirees and workers who have been contributing 10% of their pay to their retirement benefits.

Call your U.S. Representative today, toll free, at 1-888-981-9704.

Tell your Representative that legislation to address the fiscal crisis in Puerto Rico must protect the pensions of Puerto Rico’s retirees and workers.

Congressional Funding Work at an Impasse

After a flurry of activity last week, Congress’ work on funding bills for the fiscal year beginning on October 1 came to a grinding halt. No additional funding bills moved through either the House or Senate’s funding committees.  The Energy and Water bill was the first funding bill to be considered on the Senate floor, but disagreement over an amendment introduced by Sen. Tom Cotton (R-AR) that related to trade with Iran stopped all action.  Senate Democrats are insisting that funding bills should be free of any ideological “riders,” and the President has warned that could result in vetoes.

The impasse also seems to apply to efforts to create an emergency funding bill to protect Americans from the Zika virus, which has been proven to cause birth defects and is spread by a specific type of mosquito. House and Senate Democrats have been urging their GOP counterparts to move quickly before warmer weather makes more Americans, particularly pregnant women, susceptible to harm from Zika. Senate GOP leaders acknowledged the need for emergency funding, appearing to break away from their House colleagues, but did nothing to advance an emergency bill. Meanwhile, House Democratic leaders Reps. Nita Lowey (D-NY), Rosa DeLauro (D-CT) and Debbie Wasserman Schultz (D-FL) introduced an emergency funding bill (H.R. 5044) to combat Zika which includes the President’s full request for $1.9 billion and an increase in federal financial support for Puerto Rico’s Medicaid program.  The island has already been hit hard by the Zika virus.  

It is unclear how the Senate will overcome the impasse on funding bills, including emergency spending on Zika. The House remains in a holding pattern as well. AFSCME strongly supports H.R. 5044 and other efforts to provide emergency aid to combat Zika.

House Democrats Hold Forum on Benefits of Raising the Minimum Wage

On Wednesday, Ranking Member Bobby Scott (D-VA) and other House Committee on Education and the Workforce Democratic members hosted a forum focusing on how businesses and the overall economy, in addition to low-wage workers themselves and their families, will benefit from raising the federal minimum wage. The speakers – three business owners and a leading economist – put forward a compelling case for Congress to pass legislation quickly that would finally increase the minimum wage above the current $7.25 per hour.  The business owners noted that after they raised their employees’ wages, they saved money by greatly reducing turnover and the expenses of hiring and training new workers, as well as reduced absenteeism and boosted worker productivity. They all pay wages to entry-level employees that are well above the minimum, so an increase in the wage floor would help them compete with employers who pay the bare minimum.

The economist on the panel from the Economic Policy Institute offered strong data showing that raising the federal minimum wage will stimulate consumer spending, thus invigorating local economies.  He also noted that a $12 per hour minimum wage would result in government spending savings of $17 billion annually when taxpayers no longer have to subsidize employers who pay their workers so little they are eligible for government benefits. Economic research also shows that a modest increase in the minimum wage will not result in fewer available jobs. In fact, one employer noted that one of her employees was able to give up her second job when she earned more at her company, thus opening up a job for someone else. 

AFSCME supports Raise the Wage Act (H.R. 2150), which would increase the federal minimum wage to $12 per hour by 2020. This would give tens of millions of American workers a long-overdue raise. 

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