Two Senate Dems Join Republicans In Move To Stop Biden’s Politicized ESG Investment Rule

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Michael Ginsberg Congressional Correspondent
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The Senate voted Wednesday 50-46 to block a Labor Department rule allowing retirement fund managers to consider environmental, social and governance (ESG) factors when making investments.

Before the Biden administration submitted the ESG rule in November 2022, managers were only allowed to consider fiduciary factors when making investments. Under the Congressional Review Act, Congress may pass resolutions of disapproval to block executive orders, although the resolutions are subject to presidential veto. (RELATED: House Votes To Block Biden Rule Allowing Investors To Politicize Retirement Accounts)

“I really am okay with what you want to invest in as long as it’s going to push the best rate of return,” Republican Indiana Rep. Mike Braun, the resolution’s lead sponsor, said in a floor speech.Now, over the long run, if something changes, that’s different. But currently, this rule now allows the criterion of using those ESG goals, which would be simplified, being able to push a certain ideology, a certain point of view into how requirement earnings are invested.”

“You’ve got to remember, this is a fiduciary thing. Most people, when they give money to their financial advisor, their broker, they would think that it’s going to to get the best return,” he continued.

Democratic Sens. Joe Manchin of West Virginia and Jon Tester of Montana voted with all 48 present Republicans to disapprove of the rule. The vote sets up the likely first veto of Joe Biden’s presidency.

“Bloomberg tracked it,” Braun added. “If you would actually invest according to ideology over the past few years, it would have been the difference between an 8.9% return and 6.3% return. Imagine trying to explain that in a way where someone trusted that you would be doing the best thing with their hard-earned money to get the best financial return. That is nearly a 30% cut in what you would have had otherwise. I’ve got to believe everybody would be thoroughly upset with that.”

Senate Majority Leader Chuck Schumer defended ESG investment practices ahead of the vote, writing in a Wall Street Journal op-ed that the Labor Department rule is “let[ting] the market work” while Republicans seek to “tie investors’ hands.”

Conservative groups spoke out in favor of the vote.

“For too long the intentionally obtuse investment strategy known as ESG has been used as a progressive weapon to reshape American culture and force partisan action in areas of life that have traditionally been free of political activism. Today, Congress sent a clear, bipartisan message to the Biden Administration and Wall Street elites that the American peoples’ voice is being heard and we will no longer allow the administrative state and their billionaire buddies to weaponize our retirements against us,” Consumers’ Research executive director Will Hild said in a statement.

“Today’s bipartisan vote makes clear what we have long said: ESG is an attempt to circumvent the democratic process to advance an inherently political agenda. Any move to supplant or dilute the fiduciary duty would undercut the foundations of our economic freedom and harm the American worker,” State Financial Officers Foundation CEO Derek Kreifels added.