WASHINGTON, D.C. – All GOP senators, along with Democrat Joe Manchin, have introduced legislation that, if passed, will challenge a new initiative by the administration of President Joe Biden that has just launched that will purportedly “politicize” the retirement savings of millions of U.S. residents.
The Biden administration’s Department of Labor announced in November that, as of January 30, a new Environment, Social and Governance (ESG) rule will go into effect, which will potentially jeopardize returns on 401(k) plans of 152 million Americans by allowing their plan managers to make major investment decisions based not on market conditions, but environmental and social issues instead.
This would be the case even if these environmental and social issue-based decisions would result in lower returns on investments in the process.
A disapproval resolution led by Senator Mike Braun (R-IN) is slated to be introduced on Wednesday along with a companion bill in the House of Representatives by Rep. Andy Barr (R-KY). If passed, the resolution will enable Congress to invalidate and do away with the ESG rule.
“President Biden is jeopardizing retirement savings for millions of Americans for a political agenda,” Braun said. “In a time when Americans’ 401(k)s have already taken such a hit due to market downturns and record high inflation, the last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons. That’s why we are proud to stand up against this rule for the millions of Americans who depend on these funds for their retirement.”
Senator Manchin said that he reached across the political aisle to side with Republicans in this matter due to the economic crisis that the country is currently facing.
“At a time when our country is already facing economic uncertainty, record inflation and increasing energy costs, it is irresponsible of the Biden Administration to jeopardize retirement savings for more than 150 million Americans for purely political purposes,” he said. “I’m proud to join this bipartisan resolution to prevent the proposed ESG rule from endangering retirement incomes and protect the hard-earned savings of American families. I encourage my colleagues on both sides of the aisle to support this important resolution to ensure Congress is promoting economic security for West Virginians and Americans, not further exacerbating the serious economic challenges they are already facing.”
Last week, 25 states sued the Biden Administration over the new ESG rule, and GOP senators said on Wednesday that they expect at least one more Democrat – if not more – to side with their disapproval resolution.
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