Biden knocks down GOP ban on socially conscience federal investments
Republican lawmakers in Congress have had their eye on what is often called socially-conscience investing.
And that pitted them against President Joe Biden.
Congress passed a bill restricting government retirement fund managers from considering factors such as climate change, social concerns of impending lawsuits when selecting where to invest retirement funds.
Such investments were banned during President Donald Trump’s term in office. The Biden administration ditched the ban and allowed, but did not require, federal pension managers to consider such factors.
And so when the bill that would essentially bring back those Trump-era restrictions reached President Biden’s desk on Monday, he issued the first veto of his of his presidency.
No doubt Congressional Republicans will try to overturn the veto. And there is no doubt they will fail. They simply haven’t the votes.
And that’s good. Because politicians like the president and Congress aren’t professional money managers. They can and should act to limit or ban federal or even private investments where national security is at risk or to sanction a dangerous rogue nation. That’s within their competence. But they shouldn’t be setting any hard and fast investment rules tied to nothing more than partisan political positions. And that goes for either side.
Retirement fund managers have a fiduciary duty to those whose money they manage. They don’t have a duty to bolster a party’s talking points. If a manager think socially conscience investing has a place in a fund’s portfolio, so be it. If not, that’s fine, too. The results will show whether the investment was wise — and whether a change in a fund’s approach or management is needed.
Congress should just let these managers do their job as best they can for the federal workers who will one day depend on that money.