House Speaker Paul Ryan (R-Wis.) must have been a little frustrated yesterday afternoon. The Republican congressman has been eager to unveil his six-part policy agenda – which he’s marketing as the GOP’s “Better Way” plan – and the first part was scheduled for release yesterday afternoon at a struggling area in Washington, D.C.
Unfortunately for Ryan, his timing wasn’t ideal: the political world was focused on Donald Trump’s overt racism yesterday, and when the Speaker unveiled his new anti-poverty proposal and fielded questions from reporters, they wanted to hear the Speaker’s thoughts on his party’s presidential candidate. Ryan ended up making headlines for his Trump comments, but the Speaker’s anti-poverty plan was largely overlooked.
And while that must have been frustrating for the Republican leader, in a way, it may have been a blessing in disguise – because if the public fully understood what Ryan was recommending with regard to poverty, he’d probably have an entirely different controversy on his hands.
Most of Ryan’s proposal is exactly what you’d expect it to be: work requirements, state block grants, tax credits, etc. The plan is based on faulty assumptions and it ignores obvious anti-poverty measures such as the minimum wage. The Center on Budget and Policy Priorities called Ryan’s blueprint “disappointing,” adding, “Most of its proposals are so vague that it’s hard to figure out how they would work or affect low-income people. And in some cases where the plan provides more specificity, the proposals would likely do more harm than good, risking increases in poverty and even homelessness among poor families with children.”
But Slate’s Jordan Weissmann highlighted the punch-line.
Specifically, Ryan and the GOP would like to abolish the Department of Labor’s recently released “fiduciary rule,” which once it’s fully implemented in 2018 will simply require that investment professionals act in their clients’ best interests when offering advice on their retirement accounts. […]Conservatives, meanwhile, have claimed the rule will make it harder for low- and middle-income families to get financial advice, which how it makes its way into Paul Ryan’s anti-poverty agenda.
This may sound a little wonky, but bear with me for a minute.
As we discussed in April, under the current rules, when investors meet with their financial advisers to talk about their IRAs, the advisers operate under something called the “suitability standard.” As Helaine Olen explained at the time, this standard allows finance-industry professionals “to make suggestions for retirement investments that take into account how clients’ investments buttress their own bottom line. The advice just couldn’t be out-and-out malfeasant.”
Your adviser can’t direct you to an investment he or she knows to be bad for you, but he or she isn’t required to recommend the best possible option for you, either. If there’s a retirement-fund option that would basically work to your benefit, and that also helps your adviser with commissions or rewards, he or she can push you in that direction – even if you’d make more money following a better path.
According to the Obama administration, this translates into $17 billion a year that could be in investors’ retirement accounts, but isn’t.
So, the administration is planning to scrap the “suitability standard” and replace it with the “fiduciary rule” that will take effect in 2018.
Investment firms, not surprisingly, aren’t at all pleased, and according to Paul Ryan, blocking the fiduciary rule belongs as part of the House Republicans’ new anti-poverty agenda.
Which is kind of hilarious. How many low-income families, struggling to pay rent and put food on the table, are going to see a material difference in their lives if Paul Ryan makes it easier for finance-industry professionals to change the standards for retirement investments to benefit firms over consumers?
What’s more, let’s not miss the forest for the trees. The Speaker of the House has been eager, if not desperate, to show that he and his Republican conference are serious about governing – so serious that they’ve spent months crafting a detailed, six-point agenda that they’re rolling out this election year. More than five years after claiming the House majority, GOP leaders have declared they’re finally ready to demonstrate Republicans’ preparedness to lead.
But as it turns out, Part One of the “Better Way” platform – ostensibly the GOP’s best approach to combating poverty – is the same, stale, far-right ideas, coupled with an item from Wall Street’s wish list that has practically nothing to do with poverty.
I realize there are some in the Beltway media who believe Paul Ryan is genuinely committed to an ambitious anti-poverty agenda, largely because the Speaker tends to use the word a lot while pushing the same Republican ideas he’s supported for years.
But that doesn’t make yesterday’s pitch compelling. If anything, all Ryan has done is reinforce the doubts about his party’s capacity for governing that he hoped to dispel.