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Joe Biden Issues First Veto after Turning Down Attempt to Stop ESG Effort

The Labor Department rule lifted a Trump-era ban on retirement plan managers considering climate change or pending cases when investing

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Hrishita Chatterjee
Hrishita Chatterjee
Covering culture and trending topics

UNITED STATES: US President Joe Biden used his first veto in the span of his presidency on Monday after turning down a measure that was led by the Republicans that would dismiss a regulation permitting retirement-plan managers to give importance to climate change in their outcomes. A regulation on the environmental, social, and corporate guidelines (ESG) by the Biden administration would lose its potency. 

“This bill would risk your retirement savings by making it illegal to consider risk factors that the MAGA House Republicans don’t like,” Biden said. 

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“Retirement plan fiduciaries should be able to consider any factor that maximises financial returns for retirees across the country. That is not controversial—that is common sense,” he added. 

The narrowly divided Congress might not override this veto given that it would need a two-thirds majority in both houses. On February 28th, the bill was approved by the Republican-led House by a vote of 216–204, with a single Democrat voting in favour of the Republicans. On March 1, the Senate agreed to a companion tactic with a vote of 50-46, aided by the help of two moderate Democrats from states that supported Republicans. 

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As he mentioned in the State of the Union, Biden would deploy his veto pen if the opposition party would delimit Medicare or Social Security or augment the price of prescribed drugs. 

These measures concerning the ESG have been heavily scrutinized and criticized by the conservatives who agree to take part in “woke capitalism”. Supporters, on the other hand, mention that these guidelines in turn influence managers to take some time and think before making investments. 

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The first veto used by Biden comes with phases in common with that of former President Donald Trump, who used his first veto in March 2019. Presidential vetoes have nonetheless been less common recently. Vetoes were issued by Presidents George W. Bush, Barack Obama, and Donald Trump, who issued dozens or fewer vetoes during their terms. 

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