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Biden to use first veto after Congress blocks his ESG investing rule

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President Joe Biden is flexing his veto power for the first time in his presidency. After the House and Senate voted to block a Biden administration rule on ESG investing, he vowed to veto the legislation.

But the veto might not end the fight, as Republican-led states are also challenging the rule in court.

The Labor Department rule in question would allow retirement fund managers to consider factors like climate change when picking investments, reversing a Trump-era rule that restricted firms to only consider how investments perform.

“Due to Biden’s reckless economic policies, too many Americans are worried about rising costs of living,” Rep. Virginia Foxx, R-N.C., said. “Diverting retirement savings to fund social justice causes will make this problem even worse.”

Conservatives have increasingly targeted so-called “woke” investing, known officially as environmental, social and corporate governance (ESG) investing.

“Republicans talk about their love for the free market, small government, let the private sector do its work. But their obsession with eliminating ESG would do the opposite, forcing their own views down the throats of every company and every investor,” Senate Majority Leader Chuck Schumer, D-N.Y., said.

Supporters of the rule argue it is voluntary whether fund managers want to look at ESG or not. But a bill blocking the rule not only passed the Republican-controlled House, but cleared the Democrat-controlled Senate as well. Two Democrats, Sens. Joe Manchin and Jon Tester, sided with Republican senators. Both hail from red states, West Virginia and Montana, and hold seats up for reelection in 2024.

“This is unacceptable to the president and that is why he will veto this bill if it comes to his desk,” White House Press Secretary Karine Jean-Pierre said Wednesday.

But even with the veto pen, the rule still faces a battle in court. A large coalition of 25 Republican-led states has asked a federal judge to block it, claiming the rule will jeopardize retirement savings. The government argues it won’t, saying the rule still requires retirement plans to prioritize financial gains over ESG.

Right now, both sides are fighting over where this will be hashed out. The federal government wants to move the case from the current Amarillo, Texas, federal court, where Trump-appointed judge Matthew Kacsmaryk is seen as a roadblock to Biden’s policies. He has so far halted federal action on issues from asylum-seekers to birth control.

The red states are rejecting a change in venue, adding a plaintiff this week from Amarillo to prove the case belongs there.

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SIMONE DEL ROSARIO: PRESIDENT JOE BIDEN IS FLEXING HIS VETO POWER FOR THE FIRST TIME IN HIS PRESIDENCY.

THIS – AFTER THE HOUSE AND SENATE VOTED TO BLOCK A BIDEN ADMINISTRATION RULE ON E-S-G INVESTING.

BUT THE VETO MIGHT NOT END THE FIGHT.

THE LABOR DEPARTMENT RULE IN QUESTION WOULD ALLOW RETIREMENT FUND MANAGERS TO CONSIDER FACTORS LIKE CLIMATE CHANGE WHEN PICKING INVESTMENTS – REVERSING A TRUMP-ERA RULE THAT RESTRICTED FIRMS TO ONLY CONSIDER HOW INVESTMENTS PERFORM.

REP. VIRGINIA FOXX: Due to Biden’s reckless economic policies too many Americans are worried about rising costs of living. Diverting retirement savings to fund social justice causes will make this problem even worse.

SIMONE DEL ROSARIO: CONSERVATIVES HAVE INCREASINGLY TARGETED SO-CALLED “WOKE” INVESTING, THAT IS: ENVIRONMENT, SOCIAL AND CORPORATE GOVERNANCE, KNOWN AS ESG.

SEN. CHUCK SCHUMER: Republicans talk about their love for the free market small government let the private sector do its work but their obsession with eliminating esg would do the opposite forcing their own views down the throats of every company and every investor 10:30}

SIMONE DEL ROSARIO: SUPPORTERS OF THE RULE ARGUE IT’S VOLUNTARY WHETHER FUND MANAGERS WANT TO LOOK AT ESG OR NOT.

BUT A BILL BLOCKING THE RULE NOT ONLY PASSED THE REPUBLICAN-CONTROLLED HOUSE, BUT CLEARED THE DEMOCRAT-CONTROLLED SENATE AS WELL. 

TWO DEMOCRATS, JOE MANCHIN AND JON TESTER, SIDED WITH REPUBLICAN SENATORS. BOTH HAIL FROM RED STATES AND ARE UP FOR REELECTION IN 2024.

WHITE HOUSE PRESS SECRETARY KARINE JEAN-PIERRE: This is unacceptable to the president and that is why he will veto this bill if it comes to his desk.

SIMONE DEL ROSARIO: BUT EVEN WITH THE VETO PEN – THE RULE STILL FACES A BATTLE IN COURT. A COALITION OF REPUBLICAN-LED STATES HAS ASKED A FEDERAL JUDGE TO BLOCK IT, CLAIMING THE RULE WILL JEOPARDIZE RETIREMENT SAVINGS. 

THE GOVERNMENT ARGUES IT WON’T, SAYING THE RULE STILL REQUIRES RETIREMENT PLANS TO PRIORITIZE FINANCIAL GAINS OVER ESG.

RIGHT NOW – BOTH SIDES ARE FIGHTING OVER WHERE THIS WILL BE HASHED OUT. 

THE FEDERAL GOVERNMENT WANTS THE CASE MOVED FROM THE CURRENT AMARILLO, TEXAS, FEDERAL COURT, WHERE TRUMP-APPOINTED JUDGE MATTHEW KACSMARYK IS SEEN AS A ROADBLOCK TO BIDEN’S POLICIES. HE’S SO FAR HALTED FEDERAL ACTION ON ISSUES FROM ASYLUM SEEKERS TO BIRTH CONTROL.

RED STATES ARE REJECTING A CHANGE IN VENUE, ADDING A PLAINTIFF THIS WEEK FROM AMARILLO TO PROVE THE CASE BELONGS THERE.

I’M SIMONE DEL ROSARIO. IN NEW YORK IT’S JUST BUSINESS.