President Biden signed the first veto of his administration Monday, derailing a bipartisan bill that would have disallowed pension fund managers from considering factors like climate change and social justice when investing.
“President Biden’s first veto is against a bipartisan bill that protects retirement savings from political interference,” House Speaker Kevin McCarthy (R-Calif.) said in a statement Monday.
“It is clear that President Biden wants Wall Street to use your hard-earned money not to grow your savings, but to fund a far-left political agenda. That will hurt seniors and workers, especially after President Biden’s reckless spending caused record inflation and rapid interest rate hikes,” McCarthy also said.
The bill passed the Democrat-controlled Senate 50-46 March 1. The House version passed February 28 with every Republican and a single Democrat, Maine’s Rep. Jared Golden, voting for it. Because overriding vetoes requires a two-thirds majority of both chambers, it is likely that the rule allowing ESG investing will remain.
“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,” said Sen. Joe Manchin (D-W.Va.), one of two Democrat senators who voted for the bill. Sen. Jon Tester of Montana was the other.
Manchin added that the Biden administration was engaged in an “unrelenting campaign to advance a radical social and environmental agenda” that exacerbates economic problems of Biden’s own making.
The vetoed legislation was aimed at reversing a rule allowing pension fund managers to take environmental, social, and corporate governance factors into account when investing retirees’ funds.
Some Republicans refer to ESG strategies as “woke investing” or “woke capitalism.”
Last week, for example, House Oversight Committee Chair James Comer (R-Ky.) said Silicon Valley Bank was “one of the most woke banks” because of its “ESG-type” policies, the Washington Post reported. The Post describes “woke capitalism” as a “hot-button issue” related to ESG investing.
Florida Governor Ron DeSantis, a Republican, announced an 18-state alliance to “push back against President Biden’s environmental, social, corporate governance (ESG) agenda that is destabilizing the American economy and the global financial system.”
“We as freedom loving states can work together and leverage our state pension funds to force change in how major asset managers invest the money of hardworking Americans, ensuring corporations are focused on maximizing shareholder value, rather than the proliferation of woke ideology,” a March 16 joint statement from the 18 states said.
ESG factors can include divesting from fossil fuels, supporting LGBTQ+ rights, ensuring diversity among board members, taking stances on human rights issues, setting policies based on climate change, and more, according to Investopedia.
Despite the bipartisan nature of the bill, President Biden, in describing this reasoning for vetoing it, pointed to “MAGA House Republicans.” He specifically mentioned Rep. Marjorie Taylor Greene (R-Ga.), who voted for the bill along with the rest of the House Republicans and one Democrat.
“I just vetoed my first bill,” Biden tweeted Monday afternoon.
“This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like,” the tweet also said.
“Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not.”
Biden appended a video to the tweet which shows him signing paperwork. A title burned into the footage says, “President Biden vetoes extreme MAGA limitations on retirement funds.”
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