President Joe Biden has issued the first veto of his presidency by rejecting a bill that would’ve overturned regulations allowing employee retirement plans to consider Environmental, Social and Governance factors when making investments.
The Labor Department regulations Mr Biden’s veto will allow to go into effect would have effectively reinstated a Trump-era ban on managers of retirement plans considering factors such as climate change or pending lawsuits when making investment choices. Because suits and climate change have financial repercussions, administration officials argue that their predecessors were courting possible disaster.
In his veto message to Congress, Mr Biden said he was “returning herewith without my approval” the legislation, which passed the GOP-controlled House and the Democratic-controlled Senate. Only two Democrats in the Senate voted for the measure, making it unlikely that backers of the effort in Congress could reach the two-thirds majority required in each chamber to override the veto.
“The Department of Labor's final rule protects the hard‑earned life savings and pensions of tens of millions of workers and retirees across the country. It allows retirement plan fiduciaries to make fully informed investment decisions by considering all relevant factors that might impact a prospective investment, while ensuring that investment decisions made by retirement plan fiduciaries maximize financial returns for retirees,” he said.
He added that the GOP-sponsored resolution “would force retirement managers to ignore these relevant risk factors, disregarding the principles of free markets and jeopardizing the life savings of working families and retirees”.
“Retirement plan fiduciaries should be able to consider any factor that maximizes financial returns for retirees across the country. That is not controversial -- that is common sense,” he said.
The president also tweeted: “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.”
Ms Greene responded: “No one has put our retirement at risk more than you, Joe”.
Mr Biden’s first veto just two months after Republicans took control of the House, ending a period of unified Democratic control of Washington.
He previously threatened to veto a similar resolution that rejects a new criminal code passed by the District of Columbia City Council, but he later relented and is allowing that bill to become law.
With additional reporting by agencies