Senate Votes To Block Biden's ESG Investing Rule
Senate Votes To Block Biden's ESG Investing Rule

Senate Votes To Block Biden’s ESG Investing Rule

March 2, 2023 Diana Sutton News 0

Republicans gained ground in their campaign against “sustainable investment” after the US Senate, which is controlled by Democrats, voted to block the Labor Department’s rule“woke” president Joseph Biden’s first veto and capitalism.

The Biden administration rule, which would permit retirement plans to consider climate change and other environmental, social, and governance issues in their investment decisions, was repealed 50-46 by the strong Republican majority. Democratic moderates Republicans and Democratic lawmakers from West Virginia and Montana joined forces to enact the measure.

The law overturns a Trump administration directive that mandated retirement plans invest only based on financial considerations and permits ESG variables to be considered if they are in the best financial interests of plan beneficiaries. Republicans accuse ESG of attempting to inject climate politics into Americans’ financial planning, and they are right to do so.

Legislation from 1996 gives Congress the power to reject federal agency rules with a simple majority vote. The rule, which would make it simpler for plan managers to consider ESG factors when they make investments and exercise shareholder rights like proxy voting, has been denounced by Republicans.

Take A Peek At Some Of The Most Recent Posts That Are Making Waves:

The GOP has turned ESG into a lightning rod for left-wing politics, branding the investment vehicle as such. Republicans in Congress intend to enhance their investigation of sustainable investing, while more than a dozen Republican state attorneys general have criticized ESG financial practises.

John Fetterman of Pennsylvania, Jeff Merkley of Oregon, and Dianne Feinstein of California, three Democratic senators, were not present for the vote, which the Senate was compelled to take following the House’s passing on Tuesday evening.

Biden suffered a rare defeat in the Senate, where Democrats now hold a one-seat majority, with the bill’s passage. It also emphasizes how ESG politics will influence the 2024 presidential and congressional elections.

Tester has already declared his intention to seek for office again in 2024. If Manchin decides to run for reelection, he will likely face a well-funded GOP opponent.

“I’m opposing this Biden administration rule because I believe it undermines retirement accounts for working Montanans and is wrong for my state,” Tester said in a statement.

Several significant Wall Street fund managers, including BlackRock Inc. and State Street Corp., support the Labor Department’s rule in an effort to tailor “green” investment goods for users of retirement plans.
The Republican-led House passed its version on Tuesday by a vote of 216 to 204, and the vote totals in both chambers show that Congress lacks the two-thirds majority required to overturn a Biden veto.
Biden would reportedly veto the legislation, according to the White House, which claims that the rule protects workers by ensuring  “that fiduciaries have the fullest set of available tools to protect their life savings and pensions.”
“Republicans talk about their love of free markets, small government and letting the private sector do its work,” White House Press Secretary Karine Jean-Pierre said Wednesday. “The Republican bill is opposite of that. It forces MAGA Republicans’ ideology down the throats of private sector and is handcuffing investors as well.”
In 2022, the majority of ESG-focused stock indices underperformed. According to data provided by Bloomberg, net inflows to ESG-labeled exchange-traded funds decreased to roughly $2.9 billion in 2022 from a record $36 billion in 2021. However, that year saw the markets suffer their worst losses since the financial crisis of 2008.
Republicans have added the regulation as a front in the battle of political cultures, under the leadership of Indiana Senator Mike Braun. Mitch McConnell, the leader of the minority in the Senate, said it would permit the administration to jeopardize Citizens’ retirement funds “for political causes they may not even support”  This would weaken the fiduciary duty investment managers have to obtain the best returns for their clients.
“In effect, they’re talking about letting financial companies garnish the retirement savings of workers without their permission in order to pursue unrelated liberal political goals,” McConnell said on the Senate floor.

In his own remarks and in a an op-ed, Senate Majority Leader Chuck Schumer fired back, pointing out that the rule does not impose a mandate that ESG considerations weigh into investment decisions. More than 90% of companies listed on the S&P 500 already publish ESG reports, he said, and the GOP should “let the market work.”

About Diana Sutton 738 Articles
Diana is a master of the written word, with a keen eye for detail and a passion for crafting content that informs, inspires, and engages her audience. As a content editor, she brings a wealth of knowledge and experience to the table, working closely with writers and contributors to ensure that the content produced is of the highest quality and meets the needs of the target audience. With her exceptional communication skills and deep understanding of the website's editorial goals and brand identity, Diana is able to balance the needs of different stakeholders and manage multiple projects and deadlines with ease.

Leave a Reply

Your email address will not be published.


*