The press corps says it sees signs that President Biden is “moving towards the middle” as he prepares to run for re-election. You wouldn’t know about it from his presidency’s first veto, which he used on Monday to overturn a bipartisan congressional resolution protecting retirement savings from politicized investment decisions.
Resolution used by the Congressional Revision Act to repeal a Department of Labor rule protecting pension funds that invest based on environmental, social, and governance criteria or ESG criteria. This rule essentially protects pension fund managers from lawsuits if their investment choices result in lower earnings or losses as the funds pander to causes of climate change or social justice. Funds are required by traditional fiduciary standards to maximize returns.
The House of Representatives passed the resolution 216–204 with the support of one Democrat, and it passed the Democratic-run Senate 50–46 as Democrats John Tester (Montana) and Joe Manchin (West Virginia) aligned themselves with the Republicans. Both Democratic senators are up for re-election in 2024 and now have a talking point about opposing the left of their party, even if they knew Mr. Biden would block the resolution.
Biden’s ESG rule is part of an administration-wide effort to bring more private capital under the control of progressive policies. He writes the rules to guide investment in climate and other democratic priorities, which often leads to misallocation of capital. Following the ESG rule, supervisory bodies will have to pay special attention to pension fund managers to see if their political investments prove unsuccessful and hurt retirees.
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