The Senate on Wednesday overturned a Department of Labor rule that allows retirement plans to consider environmental, social and governance factors when making investment decisions, with Republicans arguing that it is a part of President Biden’s “woke” agenda.
Two Senate Democrats, West Virginia’s Joe Manchin and Montana’s Jon Tester, joined all Republicans in support of the ESG disapproval resolution, which passed by a 50-46 vote in the Democrat-majority chamber.
Four senators did not vote on the now-passed legislation, which goes to Biden’s desk for what is expected to be his first veto.
“The Senate made the right decision to vote down Biden’s rule to harm Americans’ retirement savings. I am proud to lead this bipartisan challenge,” Sen. Mike Braun (R-Ind.), who sponsored the bill, tweeted Wednesday.
“President Biden: keep your hands off our 401(k)s!” he added.
A similar bill sailed through the GOP-controlled House on Tuesday in a 216-204 vote.
House Speaker Kevin McCarthy (R-Calif.) argued that the “woke ESG rule” would let “Wall Street use your retirement savings to fund left-wing political causes.”
Republican lawmakers, such as Sen. John Barrasso (R-Wyo.) also worried that the Labor Department rule would jeopardize the retirement savings of more than 152 million Americans.
“We’re trying to protect retirement funds for people,” Barrasso said during the press conference on Wednesday.
“[Biden’s] threatening to veto our efforts. In a sense, he is basically thumbing his nose at hardworking American families who want to invest to maximize their returns for their retirement.”
Tesla CEO Elon Musk last year called ESG a scam that “has been weaponized by phony social justice warriors.”
McCarthy, on Wednesday also called for the 80-year-old president to accept Congress’ votes on the matter.
“The House blocked Biden’s woke ESG agenda. The Senate blocked Biden’s woke ESG agenda. Now it heads to the President’s desk. He must side with American workers and sign it immediately,” McCarthy argued.
On Monday, the White House vowed that Biden would veto the bill if it landed on his desk.
“The President will continue to deliver for America’s workers. If the President were presented with H.J. Res. 30, he would veto it,” the White House said in a Statement of Administration Policy defending the DOL’s ESG rule.
“The rule reflects what successful marketplace investors already know — there is an extensive body of evidence that environmental, social, and governance factors can have material impacts on certain markets, industries, and companies,” the White House added.
If Biden does veto the resolution, Congress would have to approve it again in a two-thirds majority vote in both chambers to override.