The House on Thursday failed to override President Biden’s first legislative veto, thanks to House Democrats who unanimously voted with their president and against the Republican attempt to reverse Biden’s decision.
On Monday, Biden vetoed legislation passed by the House and Senate that would block the Department of Labor’s rule that allows retirement plan fiduciaries to consider environmental, social and corporate governance (ESG) issues as they make investment decisions. Biden’s veto statement argued that Republican efforts to kill the rule would "risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like."
Republicans have said it’s the ESG rule that will put retirement savings at risk, as the Labor Department guidance will make it easier for retirement plan managers to funnel investments to companies with high ESG scores, which they say routinely perform worse than other companies.
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The override was a nearly impossible task given the very narrow GOP majority in the House, and the requirement in the Constitution that a two-thirds majority is needed to override the president.
The attempt failed – lawmakers voted 219-200 to override Biden’s veto, far short of the two-thirds majority needed. Only one Democrat voted with the GOP to override the veto.
During floor debate, Democrats sided with Biden and said fund managers should have the right to send money to companies with an ESG agenda.
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"I commend the president for his veto," said Rep. Bobby Scott, D-Va. "Workers should be able to invest their retirement savings in a way that reflects their values, such as combating climate change, without sacrificing investment returns."
But Republicans argued the Biden administration's clear support for ESG is sending signals to companies that they may have trouble attracting investment unless they adopt these goals.
"The left is using ESG investment criteria as a political tool to cudgel companies into accepting leftist policies," said Rep. Virginia Foxx, R-N.C. "If we do not override this veto, the left will use ESG investing to push non-compliant companies out of the marketplace."
While Biden and Democrats cast the bill as a Republican attempt to thwart the ESG rule, both the House and Senate votes to kill the rule saw support from Democrats. In the House, Rep. Jared Golden, D-Maine, voted to end the ESG policy, and Sen. Joe Manchin, D-W.Va., backed the idea in the Senate.
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When Biden vetoed the bill this week, Manchin blasted the president for pushing a "radical" agenda onto millions of people. The Labor Department rules affect investment guidance used by fiduciaries who manage the retirement plans of more than 140 million people.
"This administration continues to prioritize their radical policy agenda over the economic, energy and national security needs of our country, and it is absolutely infuriating," Manchin said. "West Virginians are under increasing stress as we continue to recover from a once-in-a-generation pandemic, pay the bills amid record inflation, and face the largest land war in Europe since World War II. The administration’s unrelenting campaign to advance a radical social and environmental agenda is only exacerbating these challenges."
