U.S. Senator Rand Paul (R-KY) and a group of 49 other Senators led by Senator Mike Braun (R-IN) will be introducing their bipartisan challenge to President Biden’s ESG rule which politicizes millions of Americans’ retirement investments to favor Biden’s ideological preferences rather than getting the best returns for Americans.
The Senators joining the effort include every Republican Senator: Senate Republican Leader Mitch McConnell and Senators Thune, Barrasso, Blackburn, Boozman, Budd, Britt, Cassidy, Capito, Collins, Cornyn, Cotton, Cramer, Crapo, Cruz, Daines, Ernst, Fischer, Graham, Grassley, Hagerty, Hawley, Hoeven, Hyde-Smith, Johnson, Kennedy, Lankford, Lee, Lummis, Marshall, Moran, Mullin, Murkowski, Ricketts, Risch, Romney, Rubio, Rounds, Schmitt, Rick Scott, Tim Scott, Sullivan, Tillis, Tuberville, Vance, Wicker, Young. Senator Joe Manchin joins on the Democratic side.
Representative Andy Barr (R-KY-6) is leading the House version of the legislation.
“President Biden and his administration are clearly more concerned with furthering the radical left’s anti-American agenda than they are with supporting American workers and their hard-earned retirement savings. I’m proud to join Sen. Braun and Rep. Barr in efforts to protect the retirement savings of Kentuckians and workers nationwide that have already been subjected to the repercussions of Biden’s reckless economic policies.”—Senator Rand Paul
“President Biden is jeopardizing retirement savings for millions of Americans for a political agenda. In a time when Americans’ 401(k)s have already taken such a hit due to market downturns and record high inflation, the last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons. That’s why we are proud to stand up against this rule for the millions of Americans who depend on these funds for their retirement.” – Senator Mike Braun
“Retirement plans should be solely focused on delivering maximum returns, not advancing a political agenda. If Congress doesn’t block the Department of Labor’s rule greenlighting ESG investing in retirement plans, retirees will suffer diminished returns on the investment of their hard earned money. It’s time for Congress to act and I applaud Senator Braun and our colleagues for renewing this fight.” – U.S. Congressman Andy Barr (R-KY), Chairman of the House Financial Services Subcommittee on Financial Institutions and Monetary Policy
In November, President Biden instituted a rule that explicitly permits ERISA retirement plan fiduciaries to consider environmental, social, and corporate governance (ESG) factors when selecting investments and exercising shareholder rights.
This Biden rule replaces a previous rule which mandated fiduciary decisions be made solely on getting the best returns for the 152 million American workers that depend upon ERISA for their retirement. Because ERISA covers most employer-sponsored retirement plans, we’re talking about $11.7 trillion in assets here.
Under Biden’s rule, retirement fund managers can prioritize ESG factors instead of financial returns in their investment decisions for workers’ hard-earned savings. Plan participants could unknowingly be enrolled in ESG funds, which may not align with their political views. In the most recent survey, most Americans think it’s a bad idea for companies to use their financial influence to advance a political or social agenda, as is the case in ESG investing.
A number of studies have shown that ESG investing policies have worse rates of return. For example, a study by UCLA and NYU found that over the past five years ESG funds underperformed the broader market, averaging a 6.3% return compared to 8.9% return respectively. Additionally in comparison to other investment plans, ESG investors generally end up paying higher costs for worse performance.
This disapproval resolution will receive a vote on the Senate and House floor. Under House and Senate rules, Senator Braun and Representative Barr will be able to force a vote on this resolution to nullify the rule. Additionally, the resolution only requires a simple majority vote threshold to pass and be sent to the President.
This disapproval resolution is endorsed over 100 groups so far:
60 Plus Association, Able Americans, Advancing American Freedom, AdvanceUSA, Alaska Policy Forum, ALEC Action, AMAC Action, America First Policy Institute, American Association of Senior Citizens, American Accountability Foundation, American Commitment, American Family Association, American Policy Center, American-Chinese Fellowship, Americans for Limited Government, Americans for Prosperity, American Securities Association, Americans for Tax Reform, The Buckeye Institute, Caesar Rodney Institute, The Capitalist League, Center for a Free Economy, Center for Freedom and Prosperity, Center for Individual Freedom, Center of the American Experiment, Christian Employers Alliance, Climate Science Coalition of America, Club for Growth, The Conservative Caucus, Conservatives for Property Rights, Competitive Enterprise Institute, Concerned Women for America, ConservativeHQ.com, Discovery Institute, Domestic Energy Producers Alliance, Eagle Forum, Eagle Forum of Georgia, Enterprise Supporting Climate Science, Fair Energy Foundation, Family PAC Federal, FedUp PAC, ForAmerica, Former Speaker of MO House of Representatives, Former Speaker of NC House of Representatives, Foundation for Government Accountability, FreedomWorks, Frontiers of Freedom, Goldwater Institute, Heartland Institute, Heritage Action, Independent Women’s Voice, Institute for Liberty, Institute for the American Worker, Institute for Policy Innovation, The James Madison Institute, John Locke Foundation, Kentucky Coal Association, Leadership Institute, Less Government, Life:Powered, Media Research Center, Member of KY House of Representatives, Member of LA House of Representatives, Member of WV House of Delegates, National Center for Public Policy Research, NSIC Institute, NSSF, NYS Conservative Party, Ohio Coal Association, Orthodox Jewish Chamber of Commerce, Patriot Voices, Pelican Institute, Pennsylvania Coal Alliance, Penobscot County Commissioner (Maine), Phyllis Schlafly Eagles, Pine Tree Public Policy Institute, Project 21 Black Leadership Network, Quantum Communications, Reliable Energy, Inc., Rhode Island Center for Freedom & Prosperity, Rio Grande Foundation, State Financial Officers Foundation, State Freedom Caucus Network, States Trust, State Treasurer of Arizona, State Treasurer of Indiana, State Treasurer of Kentucky, State Treasurer of Louisiana, State Treasurer of Mississippi, State Treasurer of Utah, State Treasurer of West Virginia, Taxpayers Protection Alliance, Texas Public Policy Foundation, Texas Mining and Reclamation Association, TrendMacro, Truth in Energy and Climate, Western Energy Alliance, West Virginia Coal Association, Wisconsin Institute for Law and Liberty, Yankee Institute, Young Conservatives of Texas