State retirement plans could be over before they start…

New state-sponsored retirement savings plans proposed in seven states could be in jeopardy before they even begin.

Congress took the first step Wednesday to roll back an Obama-era rule that paved the way for such plans.

California, Connecticut, Illinois, Maryland, New Jersey, Oregon, and Washington have all approved plans and are working on rolling them out. Though the details vary by state, the basic model is to automatically enroll private sector workers who don’t have a retirement plan through their jobs into a state-sponsored IRA, with a provision to opt out.

Oregon was expected to be the first to launch a pilot program this summer.

But the House passed two resolutions Wednesday which — if also approved by the Senate — would put the state retirement plans at risk.

The resolutions overturn rules that exempted state-sponsored plans from having to comply with the Employee Retirement Income Security Act (ERISA), which sets minimum standards for retirement plan providers. At the time, the Obama Administration said uncertainty about complying with ERISA was a “roadblock” to a broader adoption of state plans.

Related: California’s state-run retirement plan could help 7 million

Representative Tim Walberg, a Republican from Michigan, called that exemption from ERISA a “regulatory loophole” on the House floor Wednesday. He said it “puts workers, retirees and taxpayers at risk.”

People may get less information about the management of their plans and have fewer consumer protections if their savings are mismanaged without ERISA.

The U.S. Chamber of Commerce and other business associations support the rollback.

But Democrats accused their Republican colleagues of aligning themselves with Wall Street and standing in the way of states trying to help working Americans save for retirement, nearly half of which don’t get a 401(k) or pension at work.

“Republicans have decided Wall Street’s profits are more important than workers’ retirement savings,” said Democratic Leader Nancy Pelosi during debate.

In California, the proposed state plan could cover nearly 7 million workers.

“If approved, this has a real chilling effect on any of the states’ plans,” Ruth Holton-Hodson, a policy adviser for the California State Treasurer, told CNNMoney.

Related: 20,000 people are saving for retirement with Obama’s myRA

California’s plan was expected to roll out in 2019. It was about to solicit bids from private financial management companies to run the program. That company would have to comply with the same fiduciary standards to administer the state plan as it would for a private sector plan, Holton-Hodson said. Plus, there would be a nine-member board that would oversee the firm and approve its investments.

Without the clear exemption from ERISA for the state and employers, though, she fears no business will want to help California start the program because there would be uncertainty on its legal standing.

House Republicans agreed Wednesday that there is a retirement savings crisis that needs to be addressed, but said they want to make sure retirees’ savings were protected.

“We’re not opposed to states setting up plans that would encourage retirement,” Walberg said. “We want to make sure they are protected under the same requirements of ERISA that all other plans are. We want to make sure those dollars are there when the people need it.”

CNNMoney (New York) First published February 15, 2017: 8:40 PM ET