Obama vetoes the bipartisan repeal of his costly fiduciary rule.
Members of Congress are gradually learning the cost of having ceded so much of their regulatory power to the executive branch. The latest painful lesson came Wednesday when President Obama vetoed a bipartisan effort to kill the Labor Department’s new fiduciary rule that imposes more burdens on financial advisers.
The House and Senate had used the Congressional Review Act that lets them repeal a new regulation within 60 days of being made final. The Review Act allows such repeal votes to pass the Senate with a simple majority, dodging the 60-vote filibuster rule, and in this case three Democrats joined 53 Republicans.
But the Constitution says every bill must be sent to the President for his signature before it can become law, and Mr. Obama deep-sixed repeal with the stroke of his pen. The new rule, which requires every financial adviser to act as a fiduciary, will now remake that industry the way the Administration has so many others. One result is likely to be much less or no advice for average investors who can’t afford a “personal wealth” manager.
The repeal vote was still valuable in demonstrating bipartisan opposition, as well as getting Democrats on the record for the next election. Tens of thousands of financial advisers around the country can vote accordingly.
The vote could also help the lawsuit the industry has filed in federal court in Texas claiming that Labor acted without proper Congressional authority. The courts tend to defer to the executive when statutes are ambiguous, but in this case Labor decided to change long-understood language out of the blue without any new congressional direction. Now Congress has said it wants no such change.
Mr. Obama’s veto underscores the importance of winning the Presidency in this new era of executive-branch ascendancy. The cliche used to be that a President’s authority on domestic issues is limited to the “power to persuade.” But the administrative state has grown so large, often with Congress’s assent, that Presidents have taken advantage to change even settled law on their own. Mr. Obama has escalated this practice to the edge of law-breaking and beyond, but the courts take time to catch up and the President is now packing the courts with liberals too.
The larger lesson is that Congress needs to start reclaiming its powers —in part by writing bills with clearer, narrower language that limits executive discretion. Hillary Clinton has been watching Mr. Obama, and she’s likely to be every bit as aggressive in rewriting the law.