(CNN) President Joe Biden issued the first veto of his presidency on Monday Pension Investment Rule Allows managers of pension funds to consider the impact of climate change and other environmental, social and governance factors when making investments.
Republican lawmakers pushed the resolution through Congress, arguing that the provision is a “clumsy” policy that would push a liberal agenda on Americans and hurt retirees’ bottom lines, while Democrats say it’s not about ideology and will help investors.
Resolution repealing the Labor Department Ordinance, Passed by both houses of Congress Joe Mnuchin of West Virginia and Jon Tester of Montana voted with Democrats in the Senate.
“I signed this veto because the legislation passed by Congress would put the retirement savings of individuals across the country at risk. They couldn’t consider investments that weren’t affected by the climate, which could be affected by overpaying executives, and that’s why I decided to veto it — vetoing it makes sense,” Biden said. said in a video posted on social media on Monday afternoon.
Biden can be seen signing the veto in a video taken in the Oval Office earlier Monday.
The veto makes good on Biden’s frequent promise to veto legislation passed by the GOP-controlled House with which he disagrees. Even before Republicans took control of the chamber, Biden often touted his ability to change their priorities. “The good news is I’ll have the veto pen,” he told a group of donors in Chicago days before the November midterm elections.
Opponents of the rule could try to override Biden’s veto, but at this point it’s unlikely they’ll get the necessary two-thirds majority in each chamber.
Biden’s first presidential veto reflects the reality of a changed political order in Washington, where Republicans now control the House after winning back the chamber from Democrats in the 2022 midterm elections.
Previously, Democrats controlled both the House and Senate. Now, only the President’s party has a majority in the Senate.
Most legislation passed by the current GOP-controlled House cannot pass the Democratic-controlled Senate. But a resolution to override the investment rule would need a simple majority in the Senate to pass. Republican lawmakers filed it under the Congressional Review Act, which allows Congress to withdraw regulations from the executive branch without needing to clear the 60-vote threshold in the Senate required for most legislation.
Opponents of the rule argued that it politicized pension investments and that the Biden administration was using it as a way to promote a liberal agenda.
Wyoming’s Republican Senate. John Barrasso said at a news conference earlier this year, “What’s happened here is that the armed bureaucracy of the Department of Labor has come up with new regulations on pension funds, and they want the pension funds to be invested. Things that are consistent with their very liberal, left-wing agenda.”
Proponents of the rule argue that it is not a mandate — it allows, but does not require, consideration of environmental, social and governance factors in investment selection.
Senate Majority Leader Chuck Schumer, in defending the rule, said Republicans are “using the same tired attacks we’ve heard for a while, which is raising awareness. … But Republicans are missing or ignoring an important point: None of this. The (Labor Department) rule is a mandate. imposes.”
“It’s not about ideological preference, it’s about looking at the bigger picture where investments can minimize risk and maximize returns,” he said, noting that it’s a narrow rule that “allows the free market to do its job.”
The Management policy statement Biden warned that he would veto the measure if introduced, saying, “The 2022 rule is not a mandate — it does not require any fiduciary to make investment decisions based solely on ESG factors. The rule ensures that pension plan fiduciaries must engage in risk and return analysis of their investment decisions and recognizes that these factors are relevant to that analysis.”
This story has been updated with additional updates.