Yesterday, the Financial CHOICE Act of 2017 passed the House of Representatives along party lines, with 233 Republicans and no Democrats voting in favor of the bill, and 185 Democrats and one Republican voting against it. In the event it were to also pass the Senate and become law, the CHOICE Act would do profound, broad-based damage to the future financial security of America’s working families.

Among the many damaging things the bill does is to repeal of the Conflict of Interest rule, aka the “fiduciary” rule. The fiduciary rule is the regulation that requires that financial professionals advising retirement savers act in the best interest of their clients—like doctors and lawyers are already required to do. The rule prohibits financial advisers from doing things like steering clients into investments that provide the adviser a higher commission but provide the client a lower rate of return. This rule is sorely needed—conservative estimates put the cost to retirement savers of “conflicted” advice at $17 billion a year. It is noteworthy that today is the day that the fiduciary rule was implemented. This is a huge win for retirement savers, though this big step forward comes with a couple of glaring catches.

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Today the U.S. House of Representatives begins consideration of the Financial CHOICE Act of 2017, a sweeping bill that would make a number of extensive changes to the institutions that oversee the American monetary and financial system.

The CHOICE Act is frequently (and accurately) described as an effort to undo much of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is the critical banking regulation passed under President Obama after the financial crisis of 2008/2009 to help avert future crises. The provisions in the CHOICE Act that repeal major parts of Dodd-Frank have rightly received a great deal of attention. But, there is more to the CHOICE Act than rolling back Dodd-Frank. Below we highlight two lesser-known but highly concerning components of the bill.

The CHOICE Act would make major and undesirable changes to the governance and conduct of the Federal Reserve.

The status quo of the Federal Reserve should not persist. Governance should become more transparent and representative and policy should weigh the economic interests of low and middle-wage workers more highly. But the reforms proposed in the Financial CHOICE Act go in precisely the wrong direction regarding both governance and policy conduct of the Fed.

Fed Governance

In regard to governance, the Financial CHOICE Act proposes expanding the influence of regional Federal Reserve Bank presidents on the Federal Open Market Committee (FOMC), at the expense of the Federal Reserve’s Board of Governors (BOG). Regional presidents are chosen through largely opaque processes led by regional Federal Reserve Bank boards of directors. These regional boards are dominated by financial and corporate interests. Fed Governors, conversely, are nominated by the President and must be confirmed by the Senate. This insures at least some modicum of democratic accountability. Voting rights on the FOMC are supposed to be split 7-5 in favor of the BOG (currently there are two vacancies on the BOG, so the regional banks already have parity).

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As the Trump administration considers weakening the long-awaited “fiduciary rule”, industry-backed groups continue to release transparently self-serving “research” purporting to show that the rule, which protects retirement savers against sales pitches disguised as financial advice, will do more harm than good.

Most recently, the U.S. Chamber of Commerce released a report misleadingly entitled, The Data Is [sic] In: The Fiduciary Rule Will Harm Small Retirement Savers. The data actually show nothing of the kind. As the Consumer Federation of America has pointed out, even comparing a partial estimate of the harm done to savers from conflicted advice with an inflated estimate of the cost of implementing the rule shows that the rule’s benefits vastly outweigh its costs.

This hasn’t prevented the Chamber and others from claiming that the rule will harm investors by restricting access to retirement services, limiting investment options, and increasing fees paid for investment advice. These claims are based on surveys of firms with an interest in weakening or overturning the rule, conducted by industry associations and conservative groups who are in many cases ideologically opposed to government regulation. As EPI Vice President Ross Eisenbrey recently told the acting Solicitor of Labor, affected industries invariably predict dire outcomes from regulations they oppose since they are rarely called to account when their predictions prove unfounded.

Even if the industry’s questionable predictions that the rule could cause some retirement savers to experience reduced access to investment products or advice are borne out, it doesn’t follow that investors will be harmed by the fiduciary rule. The rule’s purpose is to ensure that any retirement investment advice serves the investor’s best interest, not the adviser’s self-interest. The fact that salespeople masquerading as financial planners will no longer be able to offer conflicted advice that steers people to costly products doesn’t mean investors will be harmed—to the contrary. And since bad products and services crowd out good ones, the anticipated fiduciary rule—despite the Trump administration’s delay in implementing it—has already expanded the market for low-cost investment options.

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It has been declared “infrastructure week” by the Trump administration. On the face of it, that should be excellent news. The U.S. economy would benefit enormously from an ambitious increase in public investment, including infrastructure investment. Such investment would create jobs and finally lock-in genuine full employment in the near-term, and would provide a needed boost to productivity growth (or how much income and output each hour of work generates in the economy) in the medium-term. Further, infrastructure investments would ensure that we do not leave future generations a deficit of underinvestment and deferred maintenance of public assets.

This clear need is why we at EPI have been such enthusiastic backers of the Congressional Progressive Caucus (CPC) plan to boost infrastructure investment. The CPC investment plan is up to the scale of the problem, and it confronts the need to make these investments head-on, without accounting gimmicks or magical thinking about where the money for these investments will come from.

Despite being long-standing and loud proponents of the need for more infrastructure investment, however, we cannot say we expect much from the Trump administration’s infrastructure week. Why not? Because the most common theme in the Trump administration’s approach to infrastructure is pure obfuscation about how it will be paid for. If you’re not willing to say forthrightly how you’re going to pay for infrastructure investments, you really cannot be serious about it. As the old adage goes, “show me your budget and I’ll tell you what you value”.

The recently released Trump federal budget plan guts infrastructure, period. Read the link—the damage the Trump budget would do to public investment and infrastructure is staggering. This alone should make any open-minded person extraordinarily skeptical of their claims to value infrastructure spending.

The Trump campaign plan on infrastructure was notable only for its shallowness and its determination to increase cronyism in infrastructure provision. The plan claimed that the problem with American infrastructure investment was a lack of innovative financing, and that the private sector could somehow be convinced to build infrastructure at no cost to taxpayers. This was obviously false. Even long-standing, bipartisan efforts to leverage private sector financing of infrastructure have ranged from disappointing to disastrous. And in no case did they provide a free lunch to taxpayers—unless taxpayers have a huge preference to paying tolls to private companies rather than the same amount of tolls or taxes to governments.

The problem holding back increased investment in American infrastructure is simple: politicians are simply unwilling to increase public spending in a transparent way. This must be overcome—America needs a significant investment in public assets, and it needs this investment to be transparent, subject to democratic accountability, and long-lived.

The sketch of the new Trump infrastructure effort included in their budget shows clearly that they do not get this. Instead, the plan is more obfuscation and magical thinking. They claim their plan will lead to $1 trillion in new investments. Yet only $200 billion in new federal spending is specified (and again, this must be balanced against the enormous cuts to public investment already embedded in their overall budget plan). Where does the rest of the funding come from? In a word, nowhere. There is hand waving about leveraging the private sector and vague claims that federal “divestment” from infrastructure provision will somehow empower state and local governments to do more (but without any new funding source for these governments!). But like Trump’s campaign plan, this is an unserious document meant to sound like an infrastructure investment plan, but one that would radically underinvest in projects overall, and which would prioritize projects that can provide profits to private entities (like toll roads to airports) rather than projects that provide the largest welfare boost to vulnerable communities (say replacing lead-laced water pipes for communities like Flint, Michigan).

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Back in March, the Trump administration released its “skinny” budget. The skinny budget laid out the administration’s priorities for the next two years of discretionary spending. This skinny budget made absolutely disastrous cuts to nondefense discretionary (NDD) spending. This matters to most Americans because the NDD portion of the budget is where the vast majority of public investment is funded.

NDD spending is already on an extraordinarily austere path under current law. The Congressional Budget Office (CBO) estimates that by 2027 NDD budget authority as a percentage of GDP will fall by one-fifth, reaching a historic low of 2.4 percent. Trump’s skinny budget wanted us to get to this anemic level by next year.

And the details of the recently released full ten-year budget are far worse.

The Trump administration’s budget would cut NDD budget authority as a percentage of GDP by 56 percent, slashing it to an unprecedented 1.4 percent of GDP by 2027. CBO estimates that NDD spending will account for just 13 percent of all federal spending over the next ten years, but half of it is public investment. The full Trump budget would be an unprecedented disaster for public investment.

This highlights the enormous gap between Trump administration rhetoric about boosting infrastructure investment and the reality of their policies. Trump campaigned on a $1 trillion infrastructure proposal, but has never backed this up with a real plan. First, the campaign’s original plan was simply not serious, and would not have led to anywhere near $1 trillion in net new investment forthcoming. Next, the skinny budget cut the Department of Transportation by 13 percent. And these are not just cuts to some abstract bureaucracy, included are cuts to actual infrastructure funding. About 21 percent of those cuts come from ending the TIGER discretionary grants program that fund state-level infrastructure projects.

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The latest data from the Bureau of Labor Statistics reveals a noticeable slowdown in job growth this year. Adding in May’s 138,000 net new jobs, monthly job growth averaged 162,000 so far in 2017, and just 121,000 over the last three months, down from an average monthly gain of 187,000 jobs in 2016. While employment growth would be expected to slow as the economy approaches genuine full employment, other indicators suggest we are not that close to full employment yet, so this explanation seems insufficient. Specifically, at this point in the recovery, we should be looking to not only add jobs, but also see stronger wage growth in those jobs.

But this is not what we’ve seen. Unfortunately, wage growth has been flat over the last year. The latest data indicates that year-over-year nominal hourly wages grew 2.5 percent in May. In fact, as shown in the figure below, wage growth has averaged 2.5 percent over the last two years. If anything, we’ve seen a bit of a slowdown in wage growth this spring, and it is still below levels consistent with the Federal Reserve’s 2 percent inflation target combined with trend productivity growth of 1.5 percent. So, why has wage growth continued to be below target levels after recovery has gone on so long? The simple answer is that while the recovery has been long, it has also been weak. And this weakness combined with the extraordinary damage done during the Great Recession means that slack remains.

But, you say, the unemployment rate fell to 4.3 percent in May, its lowest in 16 years! Unfortunately, the unemployment rate fell for the wrong reasons and isn’t fully reflective of the state of the labor market. That is, in the past when unemployment was roughly as low as it is today, the labor force participation rate—notably that of the prime-age population—has been much higher. Today, there are lots of would-be workers on the sidelines not being counted, who would take a job if offered one. And, the drop in the unemployment rate in the past month is more of a sign of people giving up on finding a job than more people becoming employed. In the last month, the labor force participation rate fell 0.2 percentage points and the employment-to-population ratio also fell 0.2 percentage points. Taken together, that means that the slight drop in the unemployment rate is, in fact, due to would-be workers leaving the labor force, not getting jobs.

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Before leaving for recess last week, congressional Republicans introduced a bill that would make it more difficult for workers to form a union and collectively bargain. The misleadingly named Employee Rights Act has been introduced in prior Congresses as well. The legislation would strip workers of many rights under the National Labor Relations Act (NLRA). For example, it would prohibit voluntary employer recognition of a union. (Under existing law, an employer is free to recognize a union and bargain with its workforce when workers show majority support for the union.) The bill also reinstitutes unnecessary delay in the union election process, mandating that parties litigate issues likely to be resolved in the election.

Perhaps most ridiculous is the bill’s requirement that a union win the support of the majority of all workers eligible to vote in the union election—not just those workers who vote. Imagine if the bill’s sponsor, Congressman Phil Roe (R–Tenn.), had had the same requirement in his own election. He would have lost, and so would all of his Republican colleagues who cosponsored the bill.

The Employee Rights Act is a clear example of Republican contempt for workers’ rights to organize and bargain collectively. The legislation rigs the union election system, instituting standards for unions that no elected official could survive.

On the same day that Rep. Roe and his colleagues introduced their anti-worker legislation, Democrats introduced a bill to raise the minimum wage to $15 by 2024. The proposal would lift pay for 41 million workers—nearly 30 percent of the U.S. workforce. Raising the minimum wage to $15 per hour would begin to reverse decades of growing pay inequality.

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Earlier this week, Washington D.C.’s WAMU aired a report highlighting—and celebrating—the hardworking Mexican women on Maryland’s Eastern Shore who pick crabmeat by hand. The Mexican women are in the United States temporarily, on a nonimmigrant guestworker visa called H-2B, which allows employers to hire migrant workers for non-agricultural seasonal jobs. The subheading of the story reads “Maryland crab processors say they couldn’t stay in business without Mexican guestworkers.” A tweet with an accompanying GIF from WAMU suggests that the reason employers hire H-2B workers to pick crab is because they’re so fast at what they do.

Fancy yourself a master #marylandcrab picker? There’s a reason these Mexican women come work on H2B visas — speed https://t.co/kzKnZJOw0n pic.twitter.com/uNLO1tEUXe

— WAMU 88.5 ? (@wamu885) May 22, 2017

Impressive to say the least. I don’t doubt how productive and valuable these workers are. Their bosses say they’re the heart of the crab industry. But upon closer inspection, it seems the seafood companies don’t really think this important work is worth a fair wage. The companies have lobbied tenaciously to make sure that the legal and regulatory framework of the H-2B visa program allows them to legally underpay their workers compared to what they would have to pay to attract workers in the free market—and the two employers featured in the WAMU story are perfect examples.

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