Biden uses veto to fend off attack on ESG
President Joe Biden issued the first veto of his presidency Monday, turning back a Republican effort to bar investment managers from incorporating climate and social considerations into their decisions.
The rule that the president vowed to protect is an obscure investing principle known as ESG — shorthand for prioritising environmental, social and governance factors. It had been a widely accepted norm in financial circles for almost 20 years until Republicans recently started assailing it as “woke capitalism” that injected Democratic and liberal values into financial decisions. More than $18 trillion is held in investment funds that follow ESG principles.
The veto came amid a flurry of other presidential signings — including one that put Biden at odds with the left wing of his party — that illustrated how the president was positioning himself as a centrist in an era of divided government with an election year approaching.
On Monday afternoon, Biden signed a resolution nullifying a new crime law in the District of Columbia that reduced penalties on offenses including carjackings, which have soared in the capital in recent years. Biden, under political pressure to counter Republican attacks that he is soft on crime, had drawn intense criticism from Democrats for supporting congressional efforts to overturn the law.
The District of Columbia was granted home rule in 1973, but Congress retained the power to review its laws. Both houses of Congress embraced the Republican-led effort to block the crime bill, which had drawn objections from the local police union and was vetoed by Mayor Muriel Bowser, who was overridden by the DC council.
Biden also signed another bill championed by Republicans that would declassify some information on the origins of the coronavirus. The legislation was sponsored by Sen. Josh Hawley, R-Mo, and Chinese officials had vehemently opposed it.
Biden has been under pressure from Republicans to take a tougher stance against Beijing, particularly in the weeks after a Chinese spy balloon drifted across the continent and as President Xi Jinping of China met with Russian President Vladimir Putin in Moscow.
“We need to get to the bottom of Covid-19’s origins to help ensure we can better prevent future pandemics,” Biden said in a statement. “My administration will continue to review all classified information relating to Covid-19’s origins, including potential links to the Wuhan Institute of Virology,” a reference to the Chinese lab that worked on coronaviruses in the city where the first cases were reported.
But the array of signings Monday also illustrated the degree to which Biden is comfortable taking a battle stance against Republicans who have accused him of injecting liberal views into the federal government.
The president defended his decision to veto the effort to overturn the ESG rule by accusing far-right Republicans of doing the same thing they were accusing Democrats of doing: imposing their views on the rest of the country.
“This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like,” Biden wrote on Twitter, referring to the wing of the party that supports former President Donald Trump. “Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not.”
The Senate passed the resolution this month by a vote of 50-46 after two Democrats, Sens Jon Tester of Montana and Joe Manchin of West Virginia, joined every Republican. The vote, which came the day after the House approved the measure on a mostly party-line vote, cleared the measure to be sent to the White House, where Biden’s advisers were expecting him to veto it.
Officials in Republican-led states have argued that the rule will lead to disinvestment in fossil fuel companies that provide tax revenue and jobs in their states. On Monday, Manchin, who is up for reelection in a coal state next year, criticised the president’s decision to veto the measure.
“This administration continues to prioritise their radical policy agenda over the economic, energy and national security needs of our country, and it is absolutely infuriating,” Manchin, who had warned that the ESG rule could pose risks to energy security, said in a statement.
Speaker Kevin McCarthy, who last week held a signing ceremony to nullify the ESG rule, said Biden had sided with “woke Wall Street” over American 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,” McCarthy wrote on Twitter.
Democrats have accused Republicans and others who supported overturning the rule of not understanding its purpose.
“So, for instance, just as a hypothetical, if you are against investing in so-called ‘woke causes,’ you are actually laying out your own ESG criteria,” Sen Patty Murray of Washington said this month. “And here’s the thing: The Biden administration rule would allow that.”