White House press secretary Karine Jean-Pierre confirmed Wednesday that President Joe Biden will veto the Republican-backed bill rolling back a Labor Department investing rule if it makes it to his desk.
House Republicans advanced a bill Tuesday to undo a Biden administration rule that permits retirement plans to consider environmental, social, and corporate governance, or ESG, in their investment decisions. The veto, which had been widely speculated, could become the first of his presidency.
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"It forces MAGA Republicans' ideology down the throats of the private sector and handcuffing investors as well. The bill would bar fiduciaries from considering significant risks like extreme climate threats and poor corporate governance when they make investment decisions," Jean-Pierre told reporters during a White House press briefing.
Centrist Democratic Sens. Jon Tester (D-MT) and Joe Manchin (D-WV) signaled they will back the bill, which must first clear the Senate to get to Biden's desk. Supporters of the push to scrap the so-called ESG rule argue the policy is "woke capitalism" that undermines retirement accounts for workers, but Jean-Pierre contended it could hamstring investors.
"It would give investment professionals less flexibility to make prudent decisions, meaning they won't be free to maximize the retirement savings for millions of Americans. That would jeopardize the retirement and life savings for police officers, firefighters, teachers, and tens of millions [of] retirees all across the country," she said.
"This is unacceptable to the President and that is why he will veto this bill if it does come to his desk," she added. "President Biden is focused on protecting workers' hard-earned life savings and pensions. And that is what he's going to continue to do."
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Under the resolution, the ESG rule “shall have no force or effect" and investment managers are expected to consider financial returns instead of other issues when making decisions. The measure cleared the lower chamber 216-204.
Biden recently announced that he will tap Julie Su to be his next labor secretary to replace Marty Walsh who is leaving to become the next executive director of the NHL Players' Association.