Image CreditVictoria Marshall
“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.
Happening now: I’m about to sign the first bipartisan bill of the year, then send it to the president’s desk. It blocks Biden’s woke ESG agenda and puts workers over Wall Street. https://t.co/cXauyBoTrv
— Kevin McCarthy (@SpeakerMcCarthy) March 9, 2023
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. Instead, investment plan fiduciaries could place retirement savings into ESG investments without the consent of employees. However, 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.
