Should a Rule Letting States Enroll Workers in State-Managed IRAs be Overturned? (H. Joint Res. 66)

What is H. Joint Res. 66?

(Updated November 30, 2018)

This bill was enacted on May 17, 2017

This resolution would repeal a regulation that allows states to establish payroll deduction savings programs and require employers that don’t have workplace savings programs to automatically deduct a specified amount of wages from their employees’ paychecks unless the worker opts out. The rule was finalized during the final months of the Obama administration.

Under the Congressional Review Act, Congress is able to overturn regulations finalized within the last 60 legislative days with simple majority votes on a joint resolution of disapproval in both chambers and the president’s signature. CRA resolutions also prevent the federal agency that created the regulation from issuing a similar rule without being directed to do so by Congress.

Argument in favor

The Obama administration’s rule created unintended consequences, such as discouraging small businesses from offering 401(k)s, fewer protections, and giving savers less control over their money. It needs to be repealed.

Argument opposed

The Obama administration’s rule wisely promotes saving for retirement by auto-enrolling workers in a savings plan if their employers don’t have a retirement savings program. Besides, workers can opt out of them.

Impact

People enrolled a state savings plan; businesses; and states that offer savings plan.

Cost of H. Joint Res. 66

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Rep. Tim Walberg (R-MN) introduced this bill to prevent the Obama administration’s state savings plan rule from taking effect because he believes it will give savers less control of their money and discourage small businesses from offering retirement plans::

“Our nation faces difficult retirement challenges, but more government isn’t the solution. A better way is to reduce costly red tape and make it easier for small businesses to band together to offer retirement plans for their employees.”

The American Association of Retired Persons (AARP) expressed support for the Obama administration’s rule, saying its repeal would have a “chilling effect” on state efforts to help employees of small businesses who don’t have access to workplace savings plans. It noted in its letter to Congress that more than half of states have implemented or are considering similar ways of promoting savings.

This legislation has the support of seven Republican cosponsors in the House.

Of Note: This bill is one of several Congressional Review Act resolutions the 115th Congress has considered as part of the Trump administration and congressional Republicans' deregulation efforts.

Media:

• House Education and Workforce Committee Press Release
  
• Law360
  
• ThinkAdvisor
  
• Time
  
• AARP (Opposed)