The U.S. Senate on Wednesday voted to kill the Biden administration's attempt to push ESG investment practices on millions of American retirement accounts through a new rule from the Labor Department.
By a vote of 50-46, Republicans were joined by Senators Jon Tester (D-MT) and Joe Manchin (D-WV) to pass the joint resolution that was approved by a bipartisan vote in the House of Representatives on Tuesday. Senators Michael Crapo (R-ID), Dianne Feinstein (D-CA), John Fetterman (D-PA) and Jeff Merkley (D-OR) were absent from Wednesday's Senate vote.
A) The Senate has aligned with the House repeal a Biden Administration rule mandating that retirement funds consider environmental, social and corporate governance, or ESG, issues in their investment decisions.
— Chad Pergram (@ChadPergram) March 1, 2023
The vote was 50-46.
The Labor Department's final rule this bipartisan group of lawmakers from both chambers have now voted to end allows woke fiduciaries to move as many as 2-out-of-3 American workers' retirement accounts into ESG-concerned funds that prioritize woke standards rather than profitability. Those whose accounts end up coopted by the values of ESG also often pay higher fees, have been shown to see a smaller ROI than traditional funds, and ultimately end up carrying more risk.
That's what the Biden administration fought for and what the president will now be forced to decide on — will he accept the will of the American people as voiced by their elected representatives? Or will he side with the radical left to jeopardize Americans' retirements and deliver the first veto of his presidency to this bipartisan resolution?
The White House threatened Congress on Monday that the president would veto the resolution if it successfully passed. One would expect someone like Biden — who's made "defending democracy" and seeking "unity" a frequent claim in his speeches — to accept Congress' conclusion and praise their bipartisan agreement. But like most of the president's claims, those continue to ring hollow.
Regardless of Biden's final decision on the resolution, ESG's opponents praised Congress for listening to their constituents and restated their commitment to fighting the integration of woke standards in financial decisions.
"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," remarked Derek Kreifels, the CEO of the State Financial Officers Foundation following the vote. "Any move to supplant or dilute the fiduciary duty would undercut the foundations of our economic freedom and harm the American worker," he added.
"I’m proud of the role that state financial officers like Riley Moore, Marlo Oaks, John Schroeder, Allison Ball, and many others have played in pushing back against the effort by the Biden Administration to codify ESG through executive rule making," Kreifels continued. "We will continue to provide the support necessary for these states to continue the fight."
"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," noted Will Hild, the executive director of Consumers' Research. "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," Hild declared.
Indeed. As Senator John Barrasso explained on Tuesday, Biden's attempt to advance ESG goals on retirement accounts is a "middle finger to middle-class Americans."
"This is just the beginning of a long battle for the future of our nation, but the tide is shifting and Woke Wall Street is on notice: You can’t take advantage of hardworking Americans and attempt to circumvent the democratic process to push your agenda and expect to get away with it," Hild added.