Donald Trump Isn’t Hiring Scaramucci. Here’s Why That Matters
It looks like hedge fund executive and Wall Street commentator Anthony Scaramucci won’t be getting any sort of role at the White House, at least not in the immediate future. And that creates more uncertainty for a group that’s already wondering what Donald Trump’s administration will mean for them: people saving for retirement.
Scaramucci, who heads SkyBridge Capital and was one of Trump’s earliest vocal supporters and donors in the financial world, was dropped from consideration for an advisory post, senior White House officials told the New York Times this week. At issue were ethical and conflict-of-interest concerns about his recent sale of a majority stake in SkyBridge to the Chinese conglomerate HNA Group, which reportedly has strong ties to China’s ruling Communist Party.
Scaramucci has been a pro-free-market commentator on all kinds of financial and political issues, but he made particularly big waves on an issue related to retirement. In various public appearances and writings, including in an op-ed in the Wall Street Journal just before the November election, Scaramucci opposed the so-called fiduciary rule. That rule, written under the Obama administration and due to take effect this April, would require financial advisors working with retirement plans to act in the best interest of their clients at all times, disclosing all conflicts of interest and any commissions or fees. (Believe it or not, that’s not already the law.)
Proponents of the rule say that its safeguards are badly needed to keep retirees from paying too much for their investments or getting cheated. But Scaramucci argues that the fiduciary rule will ultimately end up saddling investors with less diverse portfolios that won’t protect them when the current market cycle inevitably turns downward. He feels any bad actors should get tossed aside by the free market, rather than by the government.
Now that Scaramucci is out, getting rid of the fiduciary rule may be off Trump’s priority list. But the president may still shake things up for retirees. During a press conference about the government hiring freeze last week, White House Press Secretary Sean Spicer criticized the retirement benefits that the federal government offers its employees, saying that they’re overly generous and no longer in line with what the private sector offers. Republicans in Congress have also targeted that issue as one of the top priorities for reform, so there could be action to cut federal pensions and benefits soon.
Other benefits that benefit seniors, like Social Security, Medicare, and Medicaid, may also be in for changes, if not outright cuts. Although Trump stated numerous times during his campaign he would not touch Social Security and Medicare, Trump has also said he wants to turn Medicaid (which many retirees rely on to help pay for nursing home care) into a block grant program, which would allocate funds be disbursed within each state, rather than assigning the same benefits to each individual who qualifies. Such a change would mean that fewer people would qualify for coverage, and that there will be differences in the level of funding each patient receives depending on where they live. Some congressional leaders are also proponents of raising the full retirement age from 67 to 69, which would mean, in practice, that many people would collect less in Social Security over their lifetimes.