Trying to read body language and parse rhetoric is a popular game in Washington. It’s also a dangerous one for people who aspire to make insightful predictions that have a good chance of coming true. In politics, you never know who will be able to persuade whom on which issue—or, more important, when.

Having said that, I’m going to predict the House Ways & Means Committee will take a less stringent approach to 401(k) fee legislation than their colleagues on the House Education and Labor Committee.

The latter panel is led by Rep. George Miller, D-California, who has introduced a bill requiring itemization of at least 12 expenses for each investment option. It would also mandate that an index fund be offered as an alternative in each plan. Miller argues that such steps are necessary to protect middle-class retirement savings from being eroded by opaque fees.

Industry advocates say Miller’s approach could overwhelm participants with too much information and potentially scare them away from retirement products.

Now it looks as if a different option may be offered in the House Ways & Means Committee. That panel held a four-hour hearing on 401(k) fees Tuesday, October 30. The crucial exchanges came early.

Chairman Charles Rangel, D-New York, and the senior Republican, Rep. James McCrery of Louisiana, pledged to work together on the topic.

“These complex issues require a comprehensive analysis,” McCrery said. “Pension issues have always been bipartisan.”

Rangel, who has emphasized the importance of reaching across the aisle since the Democrats took over Congress in January, responded in kind.

“If we act in a cooperative way, a bipartisan way, I’m sure the American people will feel we’re trying to do the right thing,” Rangel said.

It’s true that Rangel and McCrery have pledged bipartisanship before and then split when it came time to draft and vote on legislation. Sometimes, they don’t even start on the same page, as was the case last week when Rangel introduced a massive tax reform package.
 
But on 401(k) fees, it feels as if bipartisanship, at least in the first hearing, was the real thing. Republicans likely will resist Miller’s bill as being overbearing. It looks as if Rangel will take their concerns to heart.

For one thing, he indicated that a simple fee report would be effective. “All we want to know is: Are we getting a good deal?”

More important, Rangel seemed willing to let the Department of Labor complete its process of drawing up new 401(k) fee rules before moving on legislation. The 401(k) fee rules are due to be promulgated next year.

Unlike other Democrats at the hearing, who chafed at the DOL’s timetable, Rangel had an open mind.

Tellingly, he asked the DOL official who testified whether a legislative remedy is necessary in addition to the upcoming regulatory changes. “Or should we stay out of it?”

Such a question must have fallen pleasantly on the ears of business lobbyists in the audience. They want the DOL, rather than Congress, to establish new 401(k) fee rules because it’s easier to revisit a regulation than to change a law.

During the hearing, Rangel didn’t mention an alternative bill to Miller’s written by Ways & Means member Rep. Richard Neal, D-Massachusetts. It imposes fewer disclosure requirements than Miller’s measure. In fact, the only person who brought it up was Neal.

This may indicate that Rangel—and McCrery—have their own ideas about 401(k) fee legislation. At least in the hearing, they didn’t posit and pursue a hypothesis about fees damaging retirement nest eggs, as Miller has in his hearings.

Their rhetoric Tuesday lent credence to a prediction made a few weeks ago by James Delaplane Jr., a partner at the Washington law firm Davis & Harman.

“We’re going to see Rangel and McCrery build a bill together from scratch,” Delaplane said at a Pensions & Investments defined-contribution conference in San Francisco. “That gives our community some hope on this issue.”