The U.S. Senate has voted to block a Department of Labor rule that allows retirement fund managers to consider environmental, social, and governance (ESG) factors when determining where to make investments, setting up what would be President Joe Biden’s first veto.
The vote follows the House’s 216–204 passage of the resolution on Feb. 28.
The measure now heads to President Joe Biden’s desk, although the White House has stated that he would veto it.
“The rule announced today will make workers’ retirement savings and pensions more resilient by removing needless barriers and ending the chilling effect created by the prior administration on considering environmental, social, and governance factors in investments,” Assistant Secretary for Employee Benefits Security Lisa M. Gomez said at the time. “Climate change and other environmental, social, and governance factors can be useful for plan investors as they make decisions about how to best grow and protect the retirement savings of America’s workers.”
However, opponents of the rule have argued that it allows for the liberal politicization of Americans’ retirement investments, regardless of their personal preferences.
“This rule allows Wall Street fund managers to make choices on behalf of Americans based on their own beliefs and social agenda, not what’s financially sound. It jeopardizes the hard-earned nest egg millions of families rely on to retire comfortably. Families deserve better, and I’m glad to join my colleagues to fight this rule and reverse this horrible decision.”
However, Democrats in favor of the ESG rule have argued that opposing it runs contrary to Republicans’ free-market capitalist principles.
Senate Majority Leader Chuck Schumer (D-N.Y.) accused Republicans of interfering with private investing decisions, saying on the Senate floor that they’re “forcing their own views down the throats of every company and every investor.”
Earlier on March 1, the White House denounced the Republicans’ attempt to overturn the ESG rule, branding it a “MAGA Republican” effort.
“Republicans talk about their love of free markets, small government, and letting the private sector do its work. The Republican bill is the opposite of that,” White House press secretary Karine Jean-Pierre said during a press briefing before the Senate vote.
“It forces MAGA Republicans’ ideology down the throats of private sector and handcuffing investors as well.”
The measure would prevent fund managers from taking into account major risks such as “extreme climate threats and poor corporate governance,” she explained, noting that it would “jeopardize the retirement and life savings” of millions of Americans.
When The Epoch Times asked the press secretary about the White House’s reaction to growing congressional opposition to ESG investing, she didn’t elaborate.
“As it relates to the dynamics of the Senate and where this is going, I leave that to Senator Schumer,” she said. “That’s something for him to speak to. What I can say is that if this bill reaches the President’s desk, he will veto it.”
Chris Iacovella, CEO of the American Securities Association, which represents America’s regional financial services firms, urged the president to sign the bill.
“The retirement savings of America’s working families must never take a back seat to the fee generation of Wall Street‘s ESG Industrial Complex. We are pleased the Senate is taking bipartisan action to roll back this rule, and we urge the President to accept the will of Congress and the American people,” Iacovella said in an email.
Congress can override any bill or joint resolution that has been vetoed by the president with a two-thirds majority vote in both chambers.
