House Votes To Kill Biden’s “Woke” ESG Investment Rule That Props Up “Phony Climate Movement” Heads To Senate Next

 March 1, 2023

On Tuesday, the House voted to kill the Biden administration’s controversial rule, that encourages private retirement plan fiduciaries to consider environment, social and governance (ESG) factors when making investment decisions for tens of millions of Americans. The bill now heads to the Senate, where there is already bipartisan support. Simply put members of Congress, on both sides want to take politics out of investing.

Widely seen by Republican, as part of the Biden administration’s push to inject "woke" ideology into all aspects of government, this Department of Labor rule would affect millions of Americans. Specifically, under this rule, fiduciaries who make investment decisions for the retirement plans of more than 150 million people, would be explicitly permitted under federal guidelines to consider the companies’ approach, to climate change and other social issues, instead of focusing on only profitability and return on investment for retirees.

Republicans say that’s a recipe for tanking millions of investment accounts. As a result, on Tuesday, House GOP leaders called up a resolution aimed at killing the rule, which passed 216-204. The resolution passed with one Democrat voting for it.

During the floor debate, Democrats argued that the Labor Department’s rule would free up retirement plan managers to make investments in companies that adhere to ESG standards today. They theorized that these companies, may be more profitable in the long run, even if they are less profitable today. This is a clear attempt to influence both the status of the companies and allow investments to move toward those companies who are climate change friendly. In reality, Americans would be the losers, if these companies were not able to show increased profitability over others who did not support this “woke” ideology.

Rep. Bobby Scott, D-VA said I his comments –

"Consideration of ESG factors is not at odds with making a profit,"…"But if a company has negative externalities, such as carbon-intensive business practices, vulnerability to sea-level rise, high liability risks or a record of mistreating workers who may go on strike, its stock could suffer in the long term."

-Rep. Bobby Scott, (D) VA

Rep. Mark DeSaulnier, D-Calif. added that the Labor Department rule is-

 "a recognition that if a company is inherently risky because of the business they do on their internal practices, its stock could suffer in the long run."

- Rep. Mark DeSaulnier, (D) Calif

But, stating that the rule is a form of pressure from Washington to adopt ESG standards, and fall in line with the consensus view of Democrats, several Republicans rejected this analysis. Rep. Virginia Foxx, (R)N.C. said-

"The left is using ESG investment criteria as a political tool to cudgel companies into accepting leftist policies," and "This is how the left always operates. This is just the first step. If we let this continue, the left will use ESG investing to push non-compliant companies out of the marketplace."

-Rep. Virginia Foxx,(R)N.C.

Adding that the Biden administration rule would force people to throw their retirement money into lower-performing stocks Rep. Andy Barr, (R) Ky. Said-

"It is unacceptable to encourage fiduciaries to sacrifice the savings of Americans to the orthodoxy of the woke left,"

-Rep. Andy Barr, (R) Ky.

Rep. Glenn Grothman, (R) WIS added that-

"This is an ideological push on corporations,"…[ 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 a political agenda.’" adding "It’s this pound, pound, pound that we already get from the universities, we already get from the popular culture in Hollywood, now we’ve got to get it from big business,"

Rep. Glenn Grothman, (R) WIS  

The sponsor of the resolution, Rep. Andy Barr, (R) Ky, said Democrats are threatening Americans’ retirement funds by-

"plowing them into less diversified, higher fees and lower performing portfolios at precisely the time that we need to maximize financial security for Americans approaching retirement."

- Rep. Andy Barr, (R) Ky

Rep. Bob Good, (R) VA., said the rule is only aimed at supporting the "phony climate movement," and he added that if ESG stocks performed better, "They would get those investment dollars anyway without this new rule." Also, during the debate, Republicans argued that companies that promote ESG policies generally underperform, when compared to those that don’t, carrying much higher fees.

Written under the Congressional Review Act, this resolution, which allows Congress to reject executive branch rulemakings, if both the House and Senate pass a resolution disapproving of a rule will now move forward to the Senate.

Ultimately, this disapproval resolution now leaves it to the Senate, where Republican supporters can force a vote on the Senate floor even if Democrats oppose it. If it came to the Senate floor, it could pass if every Republican and Sen. Joe Manchin, (D)W.VA., were to support the effort to kill the ESG rule.

Senate passage, however, doesn’t guarantee that the rule will die. On Monday night, The White House warned that President Biden would veto the resolution, if it were to reach his desk. In that event, the House and Senate would need a two-thirds majority vote to override Biden’s veto. In reality the House vote on this resolution shows that a two-thirds majority probably can’t be reached, given Democrats broad support of the Labor Department rule.

“I prefer men who don't fall down and weep, who absorb a blow, who do not scamper and yell when chased, but stand firm, crouch, square off, meet an attack with something like resistance, even if it kills them.”

-Ben Marcus
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