President Biden made his first ever veto of a bill (H.J. Res. 30) on Monday upholding a retirement investment rule that allows asset managers of retirement funds to consider environmental, social and governance (ESG) considerations when picking investments. Despite the bipartisan bill passing both the House and the Senate, Biden remained steadfastly behind the rule when its reversal landed on his desk.
The investment rule, known as Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, became effective in late January, following Executive Order 14030 signed by President Biden in 2021. The order directed “the federal government to identify and assess policies to protect the life savings and pensions of America’s workers and families from the threats of climate-related financial risk.”
In a news release following the retirement investment rule’s establishment, Secretary of Labor Marty Walsh stated that “removing the prior administration’s restrictions on plan fiduciaries will help America’s workers and their families as they save for a secure retirement.” This description proved controversial, as half of the country’s attorneys general had filed a lawsuit against the Department of Labor, arguing the rule “puts politics ahead of profits.” Republicans led the charge in bringing H.J. Res. 30 to Congress, but ultimately their efforts were silenced when Biden signed the veto.
“Quite frankly, we just wanted the same fair shake we’ve had forever, which is when you invest in something for your retirement that you’ll have the safest, most profitable outcome, so you don’t have to rely on the government,” U.S. Rep. Rich McCormick (R-Ga.) told Family Research Council President Tony Perkins on “Washington Watch.”
After signing the veto, Biden explained his reasoning in a video on Twitter. He claimed that the legislation that passed through Congress “would put at risk the retirement savings of individuals across the country.”
“The president claimed his bill would do the opposite of what it does,” Perkins responded. “I mean, do the American people recognize this for what it is? It’s a lie. It’s deception.” While Biden sees the ESG rule as a way to protect investors, Perkins claimed that his veto served as a reminder that “he and his administration are more committed to the social agendas of the left than to the working American families.”
McCormick also called Biden’s explanation a bold-faced lie. “The way he spins this to act like he’s the good guy, to act like he’s looking out for people, to act like we’re doing something outrageous instead of him is about as warped as you can get in politics.”
Although some Democrats supported the rollback of the ESG rule that went to the president, there are currently not enough votes to override the president’s veto. Next steps, according to McCormick, include “getting public opinion more on our side” and “call[ing] out the facts.”
