“Shouldn’t We Care?”

A MarketWatch op-ed writer is worried about grown, adult American citizens having more retirement funds in our IRAs than in our 401(k)s.

The shift from 401(k)s to IRAs moves employees’ money to a different regulatory environment. The Employee Retirement Income Security Act of 1974, which covers 401(k) plans, requires plan sponsors to operate as fiduciaries who always act in the best interest of plan participants.
In contrast, the standards of conduct for broker-dealers selling IRA investments are much less protective than the ERISA fiduciary duties of loyalty and prudence, which have consistently been characterized by the courts as “the highest known to the law.”
In addition, in the 401(k) environment, much greater emphasis is placed on the disclosure of fees in an understandable format than is the case for IRAs. And most important, 401(k)s place much more emphasis than IRAs on keeping the funds in the plan until retirement.

Those are, no doubt, useful items and anyone investing for his own retirement should care about them. The problem arises, though, when the system—here employer 401(k)s—uses these to interfere with an employee-investor’s decisions regarding what is supposed to be his own money.

As the opinion writer notes in her piece, withdrawals from either program that are made prematurely or outside of a very few exceptions (there are fewer in 401(k)s than in IRAs), are subject to a 10% tax penalty in addition to Federal and State income tax assessments. Those guardrails and limits are well-known to us Americans, and they’re all we need to make our own decisions regarding our money. If our decisions are ill-informed, that’s on us, or should be.

The opinion-writer closed her piece closed with this:

Shouldn’t we care that only 45% of assets in the private sector are protected by ERISA? And what should we do about it?

No, we should not care. We do not need Big Brother constantly looking over our shoulders, constantly using that perch to interfere with our decisions.

Americans are too dumb to manage our own fiscal affairs? One way to try to push that on us is to keep interfering with our decisions instead of letting us make our own mistakes and—critically importantly—learn from them.

That leads into what we should do about it. TL;DR: nothing. Complete answer: nothing at all. Stay out of our way.

“aren’t subject to Congressional appropriations”

In the house editorial, The Wall Street Journal editors wrote about the burgeoning tax revenues accruing to the Federal government over the first third of the present fiscal year, the reduction in spending in several government departments and agencies, and the burgeoning spending on welfare entitlement programs.

Then they added this risible claim:

…continuing boom in the giant retirement and healthcare entitlements that aren’t subject to Congressional appropriations.

The editors might want to review their junior high Civics class notes. Here’s our Constitution’s requirement for Federal spending:

Art I, Sect 9: No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law

All spending is subject to Congressional appropriations, and that includes “retirement and healthcare entitlements.” There are no caveats in that Section’s clause, no “except for programs inconvenient to alter or eliminate.”

Cutting spending on entitlements may be politically difficult but that’s not what the editors claimed. If the editors can’t find their notes, they need to listen better to their junior high interns when those kids brief them in preparation for expounding on government spending.

A Couple of Regulatory Environments

These need to be dealt with along with the EPA’s effort to deregulate energy production. “These” are the FAA’s regulation of rocket launches—the conservative right blames the FAA’s climate impact concerns, but those are not the only ones—and the FCC’s regulation of satellite deployment. Here, Progressive-Democrats are letting their hatred of all things Evil Rich get in the way of intelligent decision making.

The Federal Aviation Administration separately evaluates the environmental impact of rocket launches in the US, which has in the past delayed satellite launches.

And

Maria Cantwell objected because the bill [that would streamline and accelerate FCC satellite approvals] would help Mr Musk’s AI space ambition.

As The Wall Street Journal‘s editors closed their piece,

Permitting difficulties are America’s economic Achilles’ heel. Let’s hope they don’t get in the way of US space innovation.

It’s a Legal Question

It’s most assuredly not a medical question, nor is it a climate question. The EPA is going to announce (if it hasn’t already at the time this post is published) a roll-back of its Gina McCarthy-Barack Obama era “finding” that atmospheric carbon dioxide was a pollutant, a finding that enabled the exploding and increasingly intrusive and costly regulatory environment over a host of CO2 emission items.

The final rule, set to be made public later this week, removes the regulatory requirements to measure, report, certify, and comply with federal greenhouse-gas emission standards for motor vehicles, and repeals associated compliance programs, credit provisions and reporting obligations for industries, according to administration officials.
It wouldn’t apply to rules governing emissions from power plants and other stationary sources such as oil-and-gas facilities, the officials said. But repealing the finding could open up the door to rolling back regulations that affect those facilities.

Many of those latter regulations do need to be removed, but not all. Sulphur and mercury in smokestack emissions, for instance, still are things, but these are easily controlled—and have been for years—even with now-aging technologies and will remain regulated. CFC impacts on atmospheric ozone is less settled, but will remain regulated until a more definitive answer—by actual scientists, not government bureaucrats with science degrees or degreed folks employed by the climate funding industry—is reached.

The kicker is in this:

Public health and environmental groups have said federal climate regulations help prevent hundreds of thousands of premature deaths each year.

Even were that true, it is, or it would be in a properly objective court, irrelevant to the question of whether the McCarthy/Biden EPA finding can be repealed. Notice that: can be, not should be. This is a purely legal question: can one administration withdraw a regulatory finding and associated regulations that a prior administration enacted? Of course it can, and a current administration can rescind such things unilaterally. Only Congressionally-enacted statutes require subsequent Congressionally-enacted statutes to be rescinded. All it takes is judges and Justices who will honor their oaths of office and hew themselves to what our Constitution and the statutes before them say rather than what they might wish they said.

Of course, many of today’s District and appellate judges are badly trained by such claptrap as the chapter in the Reference Manual on Scientific Evidence, used by the Federal Judicial Center to “train” judges on climate systems, attribution science, and methodologies used to link greenhouse gas emissions to specific impacts by representing these things as settled science. The chapter has since been removed from the manual, but not necessarily the separate “training” associated with it, and certainly not the “training” already done.

As the WSJ correctly noted, here come now the climate-funding industry and its fee-seeking lawyers.

Environmental groups have said they would challenge a rollback in the courts, and it could be years before litigation is resolved.

Because of course they will. There’re tons of money to be made from their manufactured climate hysteria, and that income pig trough needs to be protected. There also are fees to be collected from those lawsuits.

Never mind that atmospheric CO2 is plant food, without which humans and plants aren’t the only species that don’t eat.

Time to Be Draconian

DoD is beginning a period of ostensibly serious performance review of the department’s several contractors.

Michael Duffey, Under Secretary of Defense for Acquisition and Sustainment:

We have completed initial reviews to assess company performance as part of this executive order and will now undergo an extended period of review in which we will make noncompliance determinations[.]
Following the upcoming decision period, we will be in touch with identified companies to begin remediation plans[.]

And this from Sean Parnell, Assistant to the Secretary of Defense for Public Affairs:

If progress doesn’t continue to be made, we will take enforcement actions. The Department of War will partner with those who perform—and hold accountable those who do not.

This has been a long time coming, assuming it’ll truly be a serious assessment with truly serious outcomes. If DoD is serious, then included high on that list of remediation plans should be cancelation of contracts. If the contractor has been noncomplying for some period of time, the cancelation and subsequent opportunity costs will be limited to the scofflaw business; there would be no loss to DoD from the contractor management team’s decision to fail to perform, and the losses to us taxpayers would be capped at what’s already been wasted on the scofflaws.

Remediation progress should be assessed on short time frames with closely spaced major milestones and a firm, nearby deadline for finally coming into full compliance. That compliance measure also should include concrete, measurable plans for staying in compliance and blocking drift away from requirements.

Shirking and throwing the contractor’s metaphorical shoes up on the desk, calling it job well done, and collecting us taxpayers’ money must be at an end. The only way to promote that is to be draconian in the department’s corrective actions. Pour encouragement des autres. Or, to fit today’s environment, il est bon de résilier un contrat avec un prestataire de temps en temps pour encourager les autres.