The Senate voted to upend a rule allowing retirement plan managers to consider environmental and social factors in their investments, in defiance of a White House veto threat.
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President Biden’s advisers have said he plans to veto the measure pushed by Republicans.
WASHINGTON — Congress on Wednesday cleared a measure to block a Labor Department rule that allows retirement plan managers to incorporate climate and social considerations into their investment decisions, setting up a veto fight with President Biden over an otherwise obscure regulation that has become a flash point in the culture wars.
The Senate passed the resolution by a vote of 50 to 46 after two Democrats, Senators Jon Tester of Montana and Joe Manchin III of West Virginia, joined every Republican. Coming the day after the House approved the measure on a mostly party-line vote, that cleared the measure to be sent to the White House, where Mr. Biden’s advisers have said he plans to veto it.
The vote was the latest piece of a broader Republican political strategy to portray Mr. Biden’s policies as extreme liberalism run amok, and to characterize his administration’s actions as attempts to force progressive values into every area of American life. The rule in question, which was updated in December, allows retirement funds to consider climate change and other factors when choosing their investments. The Biden administration put it in place to counter a rule instituted in 2020 by the Trump administration that sought to limit the ability of retirement and pension plans to consider those issues.
For nearly two decades, major corporations around the globe have widely accepted principles known as E.S.G. — short for environmental, social and governance factors. Republicans have taken aim at the philosophy, which essentially holds that companies should be focused at least in part on how their businesses affect the environment and society — not solely on profits — calling it a prime example of how Democrats and liberals have sought to impose their views on the rest of the country.
“The Biden administration wants retirement plan managers to invest people’s retirement funds based not on the best return for the money — nope — based on woke ideology,” Senator John Barrasso, Republican of Wyoming, said on Wednesday, characterizing Mr. Biden’s priorities as those of the “radical left.”
A Divided Congress
The 118th Congress is underway, with Republicans controlling the House and Democrats holding the Senate.
- A New Target for Conservatives: Republicans have brought their battle against socially conscious investing to Congress, escalating their attacks on what they call “woke capitalism.”
- D.C. Crime Bill: Republicans in Congress are moving closer to blocking changes to the District of Columbia’s criminal code, potentially setting up a politically charged veto fight with President Biden.
- Confronting China: Republicans and Democrats are pressing for major legislation to counter rising threats from China. But mere weeks into the new Congress, any bipartisan consensus is already at risk.
- Jan. 6 Video: Speaker Kevin McCarthy’s decision to grant the Fox News host Tucker Carlson access to thousands of hours of Jan. 6 Capitol security footage has effectively outsourced a bid to reinvestigate the attack.
Republicans also argue that the rule would lead to disinvestment from the fossil fuel industry, jeopardizing tax revenues and jobs. Both Mr. Manchin and Mr. Tester face re-election races next year in states that rely heavily on fossil fuels.
On Tuesday, Mr. Manchin put the matter in extreme terms, telling Fox News: “E.S.G.s by itself could just kill our economy.”
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There is no evidence of that. The rule does not mandate any action by investors and advisers, who would still be free to disregard E.S.G. principles when they decide how to allocate money.
During a debate on the Senate floor, Democrats argued that the rule was neutral.
“If you are against investing in so-called ‘woke’ causes, you are actually laying out your own E.S.G. criteria,” Senator Patty Murray, Democrat of Washington, said. “And here’s the thing: The Biden administration rule would allow that.”
Senator Sheldon Whitehouse, Democrat of Rhode Island, said the G.O.P. backlash to the bill was misguided.
“The Republicans would like us to believe that some bizarre viral epidemic of wokeism has spread into America’s great financial companies, into the investment advisers, into the banks, into all kinds of fiduciaries, and that needs to be somehow excised,” Mr. Whitehouse said. “That is not what has happened.”
In its policy statement on the bill, White House officials said that the Trump administration rule that the regulation was replacing had a “chilling effect” on advisers who wanted to consider E.S.G. factors.
“That rule stepped between workers and the investment advisers that they have trusted to protect their hard-earning life savings,” the statement said.
Source: nytimes.com
