US President Joe Biden exercised his right of veto for the first time on Monday. The move replaces the Republican-proposed investment bill. The bill would prevent mutual fund managers from considering factors such as climate change, social impacts or pending lawsuits known as ESG investing.
Biden tweeted that ” This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like. Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not, Biden said, referring to the Republican lawmaker who sponsored the bill.
To override a veto, supporters of the bill would need a two-thirds majority in both the House and Representatives.
The bill overturned a Labor Department rule by allowing fund managers to more easily incorporate ESG into investments and proxy voting. The Labor Department reinstated the ESG requirement in November, supporting former President Donald Trump’s push to penalize mutual fund managers for accounting for climate change.
Two Democratic senators voted with Republicans to pass the bill. The Democrats have a narrow majority in the Senate. Republicans say regulation would politicize investment in a way that hurts profits.
Democrats argue that the provision does not specify how ESG factors should be considered as long as the fund honors its obligations to beneficiaries. Biden also formulated the principle of financial backing for investors concerned about climate risk.
“In his first veto, Biden just sided with woke Wall Street over workers. Tells you exactly where his priorities lie. 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,” Republican House Speaker Kevin McCarthy said.
Democratic Senator Joe Manchin, who voted with Republicans on the bill, said the Biden administration is promoting a “radical political agenda. “Despite Congress’ rejection of clear, bipartisan power, President Biden chooses to put his administration’s progressive agenda ahead of the interests of the American people,” Manchin said.
During the debate on the bill, Senate Democratic Chairman Chuck Schumer accused the republics of “imposing their point of view on every company and every investor.”
(With inputs from agencies)
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