OAN Geraldyn Berry
UPDATED 4:33 PM PT – Tuesday, February 28, 2023
The Biden administration‘s rule encouraging private retirement plan trustees to take environmental, social, and governance (ESG) considerations into account when making investment decisions for tens of millions of Americans was repealed by the House on Tuesday.
According to the rule, instead of concentrating solely on profitability and return on investment for retirees, fiduciaries who make investment decisions for the retirement plans of more than 150 million people would be explicitly permitted under federal guidelines to take companies’ stances on climate change and other social issues into account.
Republicans have claimed that it will cause millions of investment accounts to crash. On Tuesday, House Republican leaders called for a resolution to repeal the regulation, which was approved 216-204. One Democrat was the lone supporter.
Democrats countered that it would enable managers of retirement plans to invest in businesses that currently follow ESG criteria and may be more successful in the long run, even if they are less profitable now.
The rule, according to some Republicans, is an attempt by Washington to force states to accept ESG standards and is in line with the Democrat Party’s prevailing viewpoint.
“This is an ideological push on corporations,” argued Rep. Glenn Grothman (R-Wis.). “This to further push down on them and say, ‘Here you are, Mr. Big Corporation, we’ll give you a nice pat on the back if we use all of your stockholders’ money to promote political agenda.’”
The resolution was created in accordance with the Congressional Review Act, which enables Congress to reject executive branch rulemakings provided a resolution opposing the rule is approved by both the House and Senate.
The disapproval resolution had been passed by the House, so the final decision lies with the Senate, where GOP backers are able to compel a vote even if Democrats object. Every Republican had supported the campaign to repeal the ESG rule, so if it reached the Senate floor, it might succeed.
Although the rule may be repealed if it passes the Senate, this is not a given. If the resolution made it to President Joe Biden’s desk, the White House announced Monday night that he would veto it.
If that occurs, the House and Senate would need a two-thirds majority vote to override Biden’s veto. However, the House vote today indicates that a two-thirds majority is unlikely to be achieved given the strong Democrat support for the Labor regulation.