Old Uncle Joe found himself the target of heavy criticism from Sen. Joe Manchin (D-WV) recently due to his choice to quickly veto a recent resolution that would have stopped fiduciaries from investing retirement funds in accordance with the environmental, social, and corporate governance movement, which has become known as ESG.
The Labor Department issued recently a final rule which reversed a prohibition of retirement investments made with ESG criteria that is established under the Trump administration. Members of both the Senate and the House approved a recent resolution earlier this past month which seeks to toss out the final rules, and Biden issued the very first veto of his tenure this past Monday to halt this new resolution.
Manchin, widely thought to be a centrist and the most prominent critic of the Biden administration policy priorities, put forth his own statement which condemns the "absolutely infuriating" veto that took place.
"West Virginians are under increasing stress as we continue to recover from a once in a generation pandemic, pay the bills amid record inflation, and face the largest land war in Europe since World War II," he stated. "The administration’s unrelenting campaign to advance a radical social and environmental agenda is only exacerbating these challenges."
Sen. Jon Tester (D-MT) also elected to vote alongside more Republican lines to reverse the final ruling. Both Tester and Manchin have been campaigning to keep their seats in the Senate from within heavily conservative states.
"This ESG rule will weaken our energy, national, and economic security while jeopardizing the hard-earned retirement savings of 150 million West Virginians and Americans," stated Manchin. "Despite a clear and bipartisan rejection of the rule from Congress, President Biden is choosing to put his Administration’s progressive agenda above the well-being of the American people."
Numerous skeptics of the ongoing ESG movement have explained that this type of investment philosophy intermixes both social and political causes, such as dropping carbon emissions or diversifying company leadership with respect to race or sex, in such a way that gives up on and distracts from overall profitability. They have highlighted lackluster performance from various ESG funds throughout turmoil in the markets over this past year as prime evidence that this type of approach is slated to fail to create ideological preference when performance declines.
Republicans praised the resolution as pushback against the White House's push for the ESG movement. Despite everything, Biden made the claim on Monday that the "Republican-led resolution would force retirement managers to ignore" a number of risk factors such as climate change, as well as disregard "the principles of free markets" and degrade the retirement savings for the average American family.