Biden issues first veto to protect socially conscious investing
“This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don't like.” — President Joe Biden
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 prioritizing 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 the ESG principle.
Biden defended the veto on Twitter, accusing far-right Republicans of doing the same thing they are 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,” the president said, 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 Republicanled
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 up for reelection in a coal state, criticized the president's decision to veto the measure.
“This administration continues to prioritize 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.”