Tester to Join Manchin to Overturn Biden ESG Investment Rule, Ensuring Bill Goes to President’s Desk

Sen. Jon Tester talks to reporters as he leaves a Senate briefing on China at the U.S. Capitol in Washington, on Feb. 15, 2023. Kevin Dietsch/Getty Images

Sen. Jon Tester (D-Mont.) announced on March 1 he will join Sen. Joe Manchin (D-W.Va.) in voting to overturn a Biden administration rule that permits money managers to consider environmental, social, and governance (ESG) in deciding where to invest retirement funds.

“At a time when working families are dealing with higher costs, from health care to housing, we need to be focused on ensuring Montanans’ retirement savings are on the strongest footing possible,” said Tester in a statement.

“I’m opposing this Biden administration rule because I believe it undermines retirement accounts for working Montanans and is wrong for my state.”

The GOP-controlled House of Representatives voted on Feb. 28 to repeal the rule through the Congressional Review Act, which allows Congress to repeal regulations within 60 days of enactment.

‘Jeopardizing Retirement Savings’

Despite the Democrats controlling the Senate, 51-49, Manchin and Tester joining all 49 Republicans would ensure the resolution gets to President Joe Biden’s desk as only a simple majority is required for passage.

The Senate is set to vote on the repeal on March 1.

The White House has said Biden would veto it.

Congress would need a two-thirds majority to override any veto, an improbability given all but one Democrat in the House, Rep. Jared Golden (D-Maine), opposed the resolution.

In a Feb. 1 statement, Manchin accused the Biden administration of jeopardizing retirement accounts with the ESG rule.

“At a time when our country is already facing economic uncertainty, record inflation, and increasing energy costs, it is irresponsible of the Biden administration to jeopardize retirement savings for more than 150 million Americans for purely political purposes,” he said.

Bipartisan Resolution

“I’m proud to join this bipartisan resolution to prevent the proposed ESG rule from endangering retirement incomes and protect the hard-earned savings of American families.

“I encourage my colleagues on both sides of the aisle to support this important resolution to ensure Congress is promoting economic security for West Virginians and Americans, not further exacerbating the serious economic challenges they are already facing.”

In November, the Department of Labor announced the finalization of the ESG rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” which took effect on Jan. 30.

Assistant Secretary for Employee Benefits Security Lisa Gomez said in a Nov. 22 press release that the rule “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.

“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.”