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The investment plan for retirement funds that collectively invest $12 trillion on behalf of 152 million Americans has been criticized by Republican lawmakers who claim the DOL regulation “politicizes” investing by allowing fund managers to pursue liberal causes.
The measure is now headed to the Senate, where Republicans hope to gather enough support to pass it as early as Wednesday. If the law gets put to President Joe Biden’s desk, the White House has warned that he would veto it.
Sen. Mike Braun (R-Ind.) and Rep. Andy Barr (R-Ky.) submitted the bipartisan resolution of disapproval last month. The legislation has the support of all Republican senators, Democratic Sen. Joe Manchin (D-W.V.), and more than 100 groups.
Barr said on the House floor that since Biden took office his administration has “waged a war on American energy production.”
He said that ESG funds carry higher fees and are less diversified than non-ESG funds. “Twenty-one percent of investors don’t even know what ESG stands for,” Barr said.
But Democrats argued that Republicans were tying the hands of capitalists by not promoting the Biden-backed plan.
Rep Sean Casten (D-Ill.) weighed in saying that Republicans “talk a good game” about personal freedom but are essentially taking the freedom of individual investors with the resolution.
“If you all are afraid of free markets … If you want to force your constituents to invest in proven losers, then please vote for this resolution,” Casten said on the House floor.
The White House said Monday that Biden would veto the bill if it came to his desk.
“The rule reflects what successful marketplace investors already know—there is an extensive body of evidence that environmental, social, and governance factors can have material impacts on certain markets, industries, and companies,” the White House said in a statement.
The measure will need just a simple majority to pass the Senate, where Democrats have a 51-49 majority. Republicans hope for a vote of at least 50-49 in favor of the measure given Manchin’s support and Sen. John Fetterman’s (D-Pa.) recent absence due to a hospitalization.
“I’ll be proud to support this commonsense measure later this week,” Senate Republican leader Mitch McConnell said in a floor speech.
Sen. Braun is bringing the resolution under the Congressional Review Act, which bypasses the Senate’s “filibuster” rule that requires the support of 60 senators to pass most legislation.
Reuters contributed to this report.
By Savannah Pointer