The Senate voted Tuesday to strike down a controversial Obama administration rule for financial advisers, setting up a showdown with the White House.
Senators voted 56-41 to overturn the Labor Department’s fiduciary rule, which requires financial advisers to act in the best interest of retirement savers.
The Senate's vote paves the way for a battle with the White House, which has pledged that President Obama will veto the legislation once it reaches his desk.
"The final rule reflects extensive feedback from industry, advocates, and Members of Congress, and has been streamlined to reduce the compliance burden and ensure continued access to advice, while maintaining an enforceable best-interest standard that protects consumers," the Office of Management and Budget said in a statement.
The expected veto will be the president's 10th. Congress has never been able to get the two-thirds support necessary to override an Obama veto.
Republicans were able to clear the joint resolution through the upper chamber despite not having 60 votes by using the Congressional Review Act. The law gives lawmakers 60 days to pass a resolution with a simple majority, though it still has to signed by the president in order for a regulation to be blocked.
They argue the Labor Department's "fiduciary" rule hurts the middle class by limiting access to financial advice, calling it another example of regulatory overreach by the Obama administration.
“This Administration has been on a long regulatory march for years now, and too often, its regulations end up hurting the very Americans they purport to help," Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellFord to bolster electric vehicle production in multi-billion dollar push On The Money — GOP blocks spending bill to kick off chaotic week in congress Overnight Health Care — Presented by Alrtia — Booster shots get bipartisan rollout MORE (R-Ky.) said Tuesday ahead of the vote.
Sen. John CornynJohn CornynAbbott bows to Trump pressure on Texas election audit Senate panel advances antitrust bill that eyes Google, Facebook Democrats up ante in risky debt ceiling fight MORE (R-Texas), McConnell's No. 2, added that the president's approach to regulations has "helped strangle the economy and the economic recovery."
"It's just another example of the wet blanket, the regulatory approach of the Obama Administration has been on the economy," he said of the Labor Department rule.
Supporters of the rule have dismissed the comments, arguing that by rolling back the rule Republicans are only working to benefit financial firms.
"This is widely accepted as being important. The only people that oppose it are the investment advisors who are putting money in their own pocket instead of those, the people they represented," Minority Leader Harry ReidHarry Mason ReidTo Build Back Better, we need a tax system where everyone pays their fair share Democrats say Biden must get more involved in budget fight Biden looks to climate to sell economic agenda MORE (D-Nev.) said.
Sen. Cory Booker (D-N.J.) argued the Labor Department's rule would help build "a level playing field."
"Let us as a nation fight for what's right... not to allow people to feast upon the retirement savings and the hard work of others," he said.
Americans for Financial Reform, an advocacy group, defended the regulation.
The rule "simply says that financial professionals who claim to offer honest, unbiased advice on retirement savings should actually have to do that," the group said.
"The motive for this resolution is not a genuine concern about the wellbeing of retirement savers. Instead, some Wall Street salespeople and their firms are worried about losing out on the billions of dollars in excess profits they have been making by recommending investment products that serve their own interests."
The resolution passed the House late last month.
Lydia Wheeler contributed.