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Obama holdovers defy Trump, refuse to stop regulatory assault on financial advisors
The boss told you back in 2015 about a horrible new Obama regulatory order, which would have made it extremely difficult for certain people to keep their financial advisors once their portfolios reached a certan level of value. It's complicated, but the long and short of it is that the rule would impose a massive tax hit on high-value portfolio holders if the commissions they pay to their advisors exceed a certain amount.
The rule never made any sense, as it got in between professional relationships between investors and their advisors that both parties were perfectly happy with. If a growing portfolio earns an advisor more commissions, and the investor is fine with that, why does the federal government need to interfere in that relationship? It doesn't. But plaintiffs' attorneys love the idea of the rule because it has the potential to spur new lawsuits, and we all know how beholden Democrats are to the plaintiffs' bar and its many generous campaign contributions.
So when President Trump took office, he asked the Labor Department to review the rule for possible adverse affects and consider either revising it or getting rid of it altogether. Now, you'll recall that Trump's original choice for Labor Secretary, Andy Puzder, withdrew. His new choice, Alex Acosta, has not yet been confirmed. So who is running the Labor Department at the moment? Obama holdovers, that's who. And when they received Trump's request, they didn't much care for it:
So what was the Labor response? Last week the holdovers from the Obama Administration announced that “the Department has concluded it would be inappropriate to broadly delay application of the fiduciary definition and Impartial Conduct Standards.”
Translation: We don’t care what an elected President says.
The Perez loyalists know that Mr. Trump’s second nominee, Alex Acosta, hasn’t been confirmed and will take time to settle in once he is. The review of the fiduciary rule won’t be completed for months, and the rule is being challenged in court. By refusing to delay implementation of the rule in its entirety, the bureaucracy hopes to entrench its main features so it will be too late or too costly or too difficult to do anything about it, even if a review ultimately concludes it was a mistake.
The Perez referenced here is Tom Perez, who was Obama's Labor Secretary and is was just elected chairman of the Democratic National Committee. He's the one who put a lot of these people in place to do Obama's bidding, and they're apparently still doing it. The fact that Trump is now the president means nothing to these people. They will simply defy him and dare him to do anything about it. As long as he doesn't even have his own Labor Secretary in place, I guess they figure the inmates can run the asylum.
When people talk about the "deep state" being in open rebellion against Trump, a lot of people scoff at the notion, as if the only thing the "deep state" can be is a bunch of dark and sinister spies. The deep state is simply the federal bureaucracy in all its inglory, and what we see here is a perfect example of how it is determined to thumb its nose at Trump's directives. In due course these Labor Department bureaucrats are going to get a new boss, who will try his best to get them with the Trump program. But even if they have to go through the motions of playing ball, it's clear these people will work to undermine Trump's agenda in any way they can.
This is exactly the swamp Trump is always talking about draining. It's lobbyists and political operatives, to be sure, but even more so it's the permanent federal bureaucracy that thinks it can set the agenda regardless of what the duly elected president wants. Trump has never run an operation in which he could give an order for something to be done, only to have his employees refuse and dare him to do anything about it. It will be a real test of his resolve and leadership skills to see if he can make them salute where other Republican presidents have failed - or get rid of them altogether.
Ultimately that's the swamp that needs to be drained, and this is a perfect example of why it matters. It really doesn't matter who the president is if the people in the executive branch just ignore his policies and do whatever they want. Ladies and gentlemen, your federal government circa 2017. Unless and until someone makes that change.
Dan's new novel, BACKSTOP, is a story of spiritual warfare and baseball. Download it from Amazon here!