“President Biden is prioritizing politics over his own people,” House Speaker Kevin McCarthy said at a signing ceremony for a bill that would nullify a Department of Labor rule that allowed retirement plan investment managers to prioritize environmental or social factors (ESG) over financial benefits when making investment decisions should it pass into law.
The rule in question, established in December 2022, undid a prior Trump-era protection that required fiduciaries to evaluate investments based solely on whether they enhance retirement savings. But now, investment plan fiduciaries can place retirement savings into ESG investments without the consent of employees. Even as ESG funds significantly underperform, expose investors to more risk, and charge higher fees than traditional investment funds, which can reduce participants’ retirement savings over time.
“Hardworking Americans don’t need a regulation from Washington that steers them into higher fee, lower performing, less diversified funds, and that’s what these so-called ESG funds are,” Rep. Andy Barr (R-KY), who brought the bill to Congress, said. “Where people who are invested in ESG — unwittingly and without their consent in many cases — they suffer losses far greater than the average investor who is broadly and diversely invested across the board. And it’s true: these funds carry 43 percent higher fees which also eat their returns.”
House Majority Whip Steve Scalise (R-LA) was also present at the signing.
“[American taxpayers] deserve to have the highest rate of return so that they can enjoy retirement to the fullest,” Scalise said. “And so President Biden’s got a choice. When Speaker McCarthy signs this bill and sends it over to The White House, President Biden’s got a choice. He’s gonna have to pick between billionaire elites and hardworking taxpayers who just want to have the best retirement possible after decades of working and paying into the system.”
House Joint Resolution 30 is the first bill to pass both the House and the Senate for the 118th Congress. The bill will now go to President Biden’s desk for approval, where it will likely be vetoed. The bill is part of Speaker McCarthy’s Commitment to America, a policy agenda for House Republicans that’s focused on a strong economy, a safe nation, and a transparent government.