WASHINGTON, D.C. (LifeSiteNews) — President Joe Biden issued the first veto of his term on Monday, rejecting a measure to overturn an administration rule enabling retirement fund managers to prioritize left-wing corporate activism over a sound return on Americans’ investments.
At the end of January, the Biden administration began implementing a Labor Department rule establishing that the federal Employee Retirement Income Security Act of 1974, as amended (ERISA) “does not preclude fiduciaries from making investment decisions that reflect environmental, social, or governance (‘ESG’) considerations.”
ESG is essentially a scoring system that incentivizes investing in companies not on the basis of their performance for customers and shareholders, but rather on their fealty to so-called “social justice” principles such as diversity and environmentalism. It has been credited with the increasingly activist turn of many corporations in recent years, at the expense of their financial performance and those who depend on their success, particularly savings and retirement accounts.
A resolution condemning the rule passed the Republican-controlled U.S. House of Representatives as well as the narrowly Democrat-controlled U.S. Senate, thanks to the support of Democrat Sens. Joe Manchin of West Virginia and Jon Tester of Montana.
In his veto message, Biden claimed that his rule, rather than exposing retirement accounts to factors unrelated to financial soundness, merely allows for “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.”
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. pic.twitter.com/PxuoJBdEee
— President Biden (@POTUS) March 20, 2023
Breitbart reports that Manchin excoriated the president for the move. “This ESG rule will weaken our energy, national and economic security while jeopardizing the hard-earned retirement savings of 150 million West Virginians and Americans,” he said. “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.”
“This rule will allow Wall Street elites to use the pension and retirement plans of millions of hard-working Americans to advance left-wing social agendas that undermine our citizens’ values and way of life,” added West Virginia state Treasurer Riley Moore.
Biden’s veto keeps the White House at odds with a growing revolt against ESG among the states. Led by Florida governor and likely presidential candidate Ron DeSantis, a coalition of 19 states recently formed to take joint action against the spread of the practice, potentially including “blocking the use of ESG in all investment decisions at the state and local level, ensuring that only financial factors are considered to maximize the return on investment, protecting retirees and taxpayers alike […as well as] stopping financial institutions from discriminating against customers for their religious, political, or social beliefs, such as owning a firearm, securing the border, or increasing our energy independence.”
It is hoped that assembling a coalition of states to all take action against ESG will have a force-multiplier effect that helps dissuade corporations from adopting the left-wing standards beyond those states’ borders.