US President Joe Biden Monday issued the first veto of his presidency, rejecting legislation seeking to overturn a Department of Labor (DOL) rule which allows retirement fund managers to consider environmental, social and governance (ESG) factors when selecting investments.
Biden argued that the rule should remain, and with his veto it effectively does–unless the legislature manages to overturn the veto. Biden said ESG factors “allow retirement plan fiduciaries to make fully informed investment decisions by considering all relevant factors that might impact a prospective investment, while ensuring that investment decisions made by retirement plan fiduciaries maximize financial returns for retirees.”
While the brunt of Biden’s messaging in the aftermath of the veto has focused on the economic benefits of ESG investing, he also took aim at the perceived ideological motivations behind the legislation, implying heavily that Republican drafters were more concerned with opposing progressive ideals than ensuring economic benefits. In a tweet announcing the veto, Biden said, “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.”
The Republican-penned legislation targeted at what supporters termed “woke capitalism,” asserting that prioritizing liberal values would come at the expense of maximizing profits. The legislation, House Joint Resolution 30, would nullify the DOL’s ESG rule.
Following Biden’s veto, Speaker of the House Kevin McCarthy (R-CA) tweeted, “In his first veto, Biden just sided with woke Wall Street over workers….Now—despite a bipartisan vote to block his ESG agenda—it’s clear Biden wants Wall Street to use your retirement savings to fund his far-left political causes.”
The bill had advanced through the Republican-controlled House of Representatives, before Democratic Senators Joe Manchin (D-WV) and Jon Tester (D-MT) joined Senate Republicans to pass the legislation up to Biden’s desk. Manchin commented on Biden’s veto, calling it “absolutely infuriating.”
The legislation will now be sent back down to the House of Representatives, where it unlikely to achieve the two-thirds majority needed to override a presidential veto.