President Biden issued his first veto Monday, nixing Congress’ move to roll back new Labor Department rules allowing retirement fiduciaries to engage in ESG investing that takes climate change and social justice politics into consideration.
Mr. Biden said he was fighting back against “MAGA House Republicans” despite the rejection of the ESG rule garnering bipartisan support in Congress.
“I just vetoed my first bill. This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like. Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not,” Mr. Biden said in a tweet announcing the veto.
The veto sends the legislation back to Congress and deals a blow to Republicans and some Democrats who wanted to prevent 401(k) managers from engaging in environmental, social and corporate governance investing that critics describe as “woke capitalism.”
“Retirement plan fiduciaries should be able to consider any factor that maximizes financial returns for retirees across the country,” Mr. Biden said in his veto message. “That’s not controversial — that’s common sense.”
Congress likely will be unable to muster a three-fifths majority to beat the veto and force the legislation into law. That means Mr. Biden‘s rule allowing ESG investing for 401(k) plans will remain in place.
Lawmakers challenged the rule using the Congressional Review Act, a tool Republicans have been leaning on in attempts to scuttle Mr. Biden‘s regulatory agenda. It was narrowly passed earlier this month with the support of just three moderate Democrats facing tough reelections: Rep. Jared Golden of Maine and Sens. Joe Manchin III of West Virginia and Jon Tester of Montana.
Mr. Manchin joined Republicans in blasting Mr. Biden‘s veto and what he called the administration’s “radical policy agenda.”
“This administration continues to prioritize their radical policy agenda over the economic, energy and national security needs of our country, and it is absolutely infuriating,” he said in a statement. “Despite a clear and bipartisan rejection of the rule from Congress, President Biden is choosing to put his administration’s progressive agenda above the well-being of the American people.”
The White House pushed back at length against criticism that ESG investing jeopardizes returns. ESG opponents say the financial strategy seeks to “weaponize Americans’ retirement savings” without their knowledge by taking non-fiduciary factors into consideration.
White House spokesperson Robyn Patterson railed against “extreme MAGA Republican” ideology.
“[Biden‘s] rule ensures plan managers have the freedom they need — without an extreme MAGA ideology screen — to make the most prudent investing decisions,” Ms. Patterson said. “That’s not controversial. That’s not woke. That’s common sense.”
Climate activists praised Mr. Biden for “using his first veto to stand up for investor freedom and respond to retirees’ demands that climate risks be treated just the same as all other financial risks in their pensions.”
• Ramsey Touchberry can be reached at rtouchberry@washingtontimes.com.
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