DOL Nominee Stands Up to Sen. Warren on Fiduciary Rule

Sen. Elizabeth Warren, D-Mass., tried unsuccessfully to get Labor secretary nominee Alexander Acosta to take a position on the department’s controversial fiduciary rule today.

Warren pointedly asked whether Acosta would defy President Donald J. Trump’s Feb. 2 memorandum ordering the DOL to delay the fiduciary rule by 60 days.

“There is an executive action that directs how the secretary will approach this rule,” a noncommittal Acosta replied.

A visibly frustrated Warren actually interrupted Acosta’s most expansive remarks on the fiduciary rule, which holds anyone working with retirement dollars to a higher legal standard.

“The rule goes far beyond simply addressing the standards of conduct,” Acosta said before the interruption.

“This is frustrating. You have dodged every single one of my questions,” Warren said. “I don’t have a lot of confidence that you are the right person for this job.”

Acosta finally had his confirmation hearing before the  Senate Health, Education, Labor, and Pensions Committee. He is Trump’s second choice after initial nominee Andrew Puzder dropped out amid a lack of support.

An Obama regulation, the fiduciary rule’s future will largely be decided by the next labor secretary. It is slated to begin taking effect April 10, although the delay is expected to be published in the Federal Register before then.

Acosta is likely to be confirmed without issue, analysts say. Sen. Lamar Alexander, R-Tenn., chairman of the committee, came to the nominee’s rescue following the Warren exchange. An opponent of the fiduciary rule, Alexander said it is “thoroughly appropriate for you to review a regulation based on the president’s directive.”

Overtime Rule, Health Care

Senators further questioned Acosta on several other regulations of note, including Obama’s overtime rule. A Texas court granted a November injunction just before the rule was to take effect.

The rule affects an estimated 4.2 million workers who were to be newly eligible for time-and-a-half wages for each hour they worked beyond 40 each week.

The rule would roughly double the $23,660 threshold at which executive, administrative and professional employees are exempt from overtime. The DOL estimates the new rule would affect more than four million workers, and 19 percent of all insurance industry workers.

Sen. Tim Scott, R-S.C., said the OT rule would result in the loss of about a half-million jobs and asked the nominee for his position. But Acosta would not directly answer Scott’s question either.

“This is an incredibly complicated rule,” Acosta said. “So for me to, sort of on the fly in this hearing, to state with certainty, I don’t think is a responsible approach.”

Acosta did agree to meet with Sen. Rand Paul, R-Kent., within 30 days of his confirmation on what the DOL can do to allow consumer to band together in large-scale health plans.

For example, AARP could bring the buying power of 33 million members, Paul said. The DOL has some authority over association health care plans under existing statutes.

“We could expand health associations simply by having someone there who says ‘Gosh what a great idea this would be,’” Paul said.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.