Biden issues first veto, overriding Republican investment bill

WASHINGTON: US President Joe Biden wielded his veto pen for the first time on Monday, overriding a Republican-led bill that would bar retirement fund asset managers from taking into account environmental, social and governance factors.

Biden tweeted that the bill would threaten “retirement savings by making it illegal to consider risk factors.” Republicans say the so-called ESG factors amount to political interference. “Your plan manager should be able to protect your hard-earned savings -- whether Rep. Marjorie Taylor Greene likes it or not,” Biden said, referring to the Republican congresswoman at the heart of the far-right wing of the Republican party.

Republicans used their slim majority in the House of Representatives to get the bill through. In the Senate, Democrats hold a thin majority but three absentees and two party members joining the Republicans was enough to get the bill sent to Biden.

Supporters of the bill say the ESG factors are driven by leftist social concerns and should not be part of financial transactions. Biden´s Labor Department reinstated the rule in November, undoing a push by former Republican president Donald Trump to penalize fund managers considering climate change in their decision-making.

Democrats pointed out that the policy is neutral on how ESG factors are taken into consideration so long as the investment fund is meeting its obligations to its beneficiaries. Major investment firms like BlackRock applauded the rule, which the Biden administration frames as a financial boost to investors concerned about climate risk.Critics say environmental, social and governance (ESG) investments allocate money based on political agendas, such as a drive against climate change, rather than on earning the best returns for savers. Republicans in Congress who pushed the measure to overturn the Labor Department’s action argue ESG is just the latest example of the world trying to get “woke.”

Biden, in a video released by the White House, said he vetoed the measure because it “put at risk the retirement savings of individuals across the country.” Only two Democrats in the Senate voted for the investment limits, making it unlikely that backers of a potential veto-override effort in Congress could reach the two-thirds majority required in each chamber.