U.S. President Joe Biden on Monday rejected a Republican proposal to prevent pension fund managers from basing investment decisions on factors like climate change, in the first veto of his presidency.
“I just signed this veto because the legislation passed by the Congress would put at risk the retirement savings of individuals across the country,” Biden said in a video posted on Twitter.
The bill cleared Congress on March 1, when the Senate voted 50-46 to adopt a measure to overturn a Labor Department rule making it easier for fund managers to consider environmental, social and corporate governance, or ESG, issues for investments and shareholder rights decisions, such as through proxy voting.
The outcome highlighted Republicans’ willingness to oppose their traditional allies in Wall Street and corporate America that adopt what party lawmakers characterize as “woke” liberal practices.
Two Democratic senators, Joe Manchin of West Virginia and Jon Tester of Montana, voted with Republicans. Both face re-election in Republican-leaning states in 2024. The Republican-controlled House of Representatives passed the bill in February.
Republicans claim the rule, which covers plans that collectively invest $12 trillion on behalf of 150 million Americans, would politicize investing by allowing plan managers to pursue liberal causes, which they say would hurt financial performance.
Senate Democratic leader Chuck Schumer accused Republicans of interfering with private investing decisions, saying on the Senate floor that they are “forcing their own views down the throats of every company and every investor.”
Manchin countered that it was the Biden administration that was pushing its “radical policy agenda” on this issue.
“Despite a clear and bipartisan rejection of the rule from Congress, President Biden is choosing to put his administration’s progressive agenda above the well-being of the American people,” Manchin said in a statement.