Biden issues first veto of presidency, allowing Labor Dept. to use ESG factors in investments

The Senate voted 50-46 on Wednesday, a day after the House voted 216-204 to pass the measure to block the Labor Department rule.

Published: March 20, 2023 1:19pm

Updated: March 20, 2023 6:16pm

President Biden on Monday issued the first veto of his presidency, blocking a measure passed last week by Congress to overturn a Labor Department rule allowing retirement plans to consider environmental, social and governance factors when making investment decisions.

The GOP-led effort received congressional passage last week in the Democrat-controlled Senate, with the White House saying it would likely get a presidential veto.

"There is extensive evidence showing that environmental, social, and governance factors can have a material impact on markets, industries, and businesses," Biden said after issuing the veto. "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."

The Senate's 50-46 vote Wednesday came one day after the House voted 216-204 to pass it. 

Supporters of the measure received the veto poorly, asserting that the Labor Department rule would enable poor industry practices and hurt Americans in the process.

State Financial Officers Foundation CEO Derek Kreifels saying that "President Biden’s decision to veto makes it clear that he prioritizes a woke political agenda above bringing relief to families who are needlessly suffering under his economy."

"Misguided ESG policies meant to force a transition to green energy will raise the cost of gasoline, natural gas, and heating oil for decades to come," he continued. "These same measures will also impact the food supply chain, adding burdensome costs to farmers and ranchers that will inevitably be passed to consumers. Allowing retirement plans to include ESG considerations takes financial decisions out of the hands of the American people and puts progressives in charge."

House Speaker Kevin McCarthy said Biden "used his presidential veto to prioritize his party's woke politics over retirees' returns" by vetoing the bill, which received votes from members of his own party.

“President Biden’s first veto is against a bipartisan bill that protects retirement savings from political interference. It is clear that President Biden wants Wall Street to use your hard-earned money not to grow your savings, but to fund a far-left political agenda," he said in a statement. "That will hurt seniors and workers, especially after President Biden’s reckless spending caused record inflation and rapid interest rate hikes.”

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