President Joe Biden issued the first veto of his presidency Monday, blocking a resolution that would have tossed what Republicans called a “woke” Labor Department rule to weigh the effect of climate change and social factors when making investments.
“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,” Biden said in a tweet. “Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not.””I just signed this veto because legislation passed by Congress would put at risk the retirement savings of individuals across the country,” Biden said in a video as he signed the veto Monday.
“They couldn’t take into consideration investments that would be impacted by climate, impacted by overpaying executives, and that’s why I decided to veto it — it makes sense to veto it,” Biden added.
The resolution to rescind the rule passed both chambers of Congress earlier this month, as Republicans claimed the “woke” policy would hurt retirees’ bottom lines. Democratic Sens. Joe Manchin of West Virginia and Jon Tester of Montana voted with Republicans in the Senate.
“What’s happened here is the woke and weaponized bureaucracy at the Department of Labor has come out with new regulations on retirement funds, and they want retirement funds to be invested in things that are consistent with their very liberal, left-wing agenda,” Republican Sen. John Barrasso of Wyoming said earlier this year.
Supporters of the rule argue it is not a mandate, but rather allows the consideration of environmental and social factors when choosing investments.
“The 2022 rule is not a mandate — it does not require any fiduciary to make investment decisions based solely on ESG factors,” last month’s statement of administration policy said as Biden threatened to veto any resolution to reverse the rule.
“The rule simply makes sure that retirement plan fiduciaries must engage in a risk and return analysis of their investment decisions and recognizes that these factors can be relevant to that analysis.”
ESG, or environmental, social and governance, is an investing strategy that weighs the impact of environmental and social risks. A number of conservative states, including Florida, Texas and West Virginia have launched investigations over the idea.
“Biden’s veto is why I formed an alliance of freedom-loving states to combat the threat posed by ESG,” Florida Gov. Ron DeSantis tweeted Monday in response to the president’s veto. “Now with Virginia, our 20-state coalition will protect our citizens against powerful economic actors using their financial might to impose ideological agenda.”
But the president said ESG factors are an important part of risk analysis.
“There is extensive evidence showing that environmental, social, and governance factors can have a material impact on markets, industries, and businesses,” Biden said in a statement Monday.
“But the Republican-led resolution would force retirement managers to ignore these relevant risk factors, disregarding the principles of free markets, and jeopardizing the life savings of working families and retirees.” Biden added.
The fact that Biden’s first veto is about promoting ESG reveals the problem: this isn’t the invisible hand of the “free market.” It’s the invisible fist of government. Don’t fall for their trick. https://t.co/qUeWxwgpxH
— Vivek Ramaswamy (@VivekGRamaswamy) March 20, 2023
“Retirement plan fiduciaries should be able to consider any factor that maximizes financial returns for retirees across the country. That is not controversial — that is common sense,” the president said.
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