The Republican-led House on Thursday failed to override President Biden’s first veto, falling short of the two-thirds majority needed to revive the resolution targeting an administration rule related to ESG investing, which takes environmental and social factors into account.
The chamber voted 219-200, with Rep. Jared Golden (D-Maine) voting with every Republican in favor of overriding the veto.
Both the House and the Senate approved a resolution that would undo the administration’s rule, sending it to Biden’s desk and forcing the first veto of his presidency. The votes in both chambers were bipartisan.
The effort to overturn the veto was not expected to be successful — only one House Democrat supported the initial resolution — but it put most of the Democratic caucus on record as supporting this type of investing for the second time. Two Senate Democrats voted for the disapproval resolution in the upper chamber.
Veto overrides are very rare for Congress. During the Trump administration just one veto was overridden — the president’s rejection of a mammoth defense bill. Former President Obama’s eight years in office only saw one veto override, and former President George W. Bush had four of his vetoes overridden.
The Biden administration rule targeted by Republicans clarifies that money managers can weigh climate change and other ESG — which stands for environmental, social and governance — factors when they make investment decisions related to retirement accounts.
It replaces a previous Trump administration rule that said money managers could only make investments based on financial considerations. Critics of the Trump rule have called it confusing, and the Biden administration has said that it discouraged consideration of ESG factors “even in cases where it is in the financial interest of plans to take such considerations into account.”
The pushback against the Biden administration rule is part of a larger Republican effort opposed to ESG investing, which some legislators have decried as “woke.” Republicans argue that considering these types of factors can come at the expense of profits, and they warn that it could harm the fossil fuel industry.
“Ultimately, President Biden had a choice to make: do you support blue collar workers who deserve the best benefits in their retirement, or billionaire elites who want to direct your funds into places that get a lower yield?” House Majority Leader Steve Scalise (R-La.) said. “And I think it’s important to keep trying and, you know, keep fighting for those workers who, when they retire, they want the highest rate of return.”
“And that’s what the bill’s all about,” he continued. “It’s disappointing that Joe Biden sold them out to go help his billionaire friends that want to inject their personal ideology at the expense of lower returns for people when they retire.”
Proponents, however, argue ESG investing allows people to both do well financially and do good for the world, and it can help protect people from investing in industries that may be on the decline as the world transitions to lower-carbon energy sources.
In a statement announcing his veto, Biden said the disapproval resolution “would put at risk retirement savings of individuals across the country.”
“They couldn’t take into consideration investments that would be impacted by climate, impacted by overpaying executives,” he continued. “And that’s why I decided to veto it.”
Not all Democrats, however, were in favor of the Biden administration rule. Sens. Jon Tester (D-Mont.) and Joe Manchin (D-W.Va.) and Rep. Jared Golden (D-Maine) supported the effort to overturn the rule when their chambers took up the disapproval resolution.