Senate Republicans will have enough votes on Wednesday to nullify the Biden administration’s new rule allowing 401(k) fund managers to consider climate change and social justice politics when investing clients’ savings, a move that will prompt President Biden to issue his first veto.
Sen. Jon Tester, Montana Democrat, told The Washington Times that he plans to side with Senate Republicans and fellow Democratic Sen. Joe Manchin III of West Virginia to support a resolution to roll back a Labor Department provision for 401(k) fiduciaries to employ environmental, social and corporate governance investing known as ESG.
The Senate is scheduled to vote on the resolution later Wednesday.
The support from two Democrats provides the necessary votes to pass a Congressional Review Act resolution and notch a win against what critics call a “woke” anti-fossil fuel investment practice that jeopardizes Americans’ retirement funds.
“I want the markets to work,” Mr. Tester said, citing concerns it would put investors at additional risk.
“At a time when working families are dealing with higher costs, from health care to housing, we need to be focused on ensuring Montanans’ retirement savings are on the strongest footing possible,” he later said in a statement. “I’m opposing this Biden administration rule because I believe it undermines retirement accounts for working Montanans and is wrong for my state.”
The resolution is privileged, which means it requires only a simple majority because it cannot be filibustered and must receive a floor vote.
The GOP-led House passed the measure Tuesday with the help of one Democrat, Rep. Jared Golden of Maine.
Once passed by the Senate, the measure will head to Mr. Biden, who he has vowed to employ his veto power. However, the House and Senate will be unable to muster the two-thirds majority required to overturn a veto, providing vulnerable Democrats like Mr. Manchin and Mr. Tester — who are both up for reelection — political cover to buck the president.
The Biden rule reimposed a provision rolled back under former President Donald Trump that greenlights ESG investing for the 401(k) accounts of roughly 150 million workers under the Employee Retirement Income Security Act of 1974. The rule does not mandate it, a point emphasized by the White House and pro-ESG Democrats.
“It’s literally allowing the free market to do its work,” said Senate Majority Leader Charles E. Schumer, New York Democrat. “Republicans have been trying mightily to turn ESG into their newest dirty little acronym. They’re using the same tired attacks we’ve heard for a while now that this is more ‘wokeness,’ that it’s intrusion into the markets and on, and on, and on.”
But Democrats like Mr. Tester and Mr. Manchin aren’t buying that argument.
Mr. Manchin lashed out against his party’s green agenda, accusing it of jeopardizing U.S. energy security and Americans’ savings.
“I rise to warn against our administration’s unrelenting campaign to weaken our national security, energy and economic security to advance their environmental and social agenda,” he said on the Senate floor. “The ESG rule we’re going to vote on later today is just another example of how our administration prioritizes a liberal policy agenda over protecting and growing the retirement accounts of 150 million Americans that will be in jeopardy.”