Politics of Biden's First Veto
March 27, 2023
Last week, President Biden issued the first veto of his Presidency. The veto blocks a repeal of a Department of Labor rule that allows, but doesn’t require, ERISA retirement fund managers to consider environmental, social, and governance (ESG) factors when investing.
How did we get here?
- November 2022: The Department of Labor issued a rule that would remove barriers to considering ESG factors in ERISA plan investments.
- February 7, 2023: Rep. Andy Barr (R-KY) introduces a joint Congressional Review Act bill with Sen. Mike Braun (R-IN) to nullify the rule and prevent future rules from taking effect. The Congressional Review Act allows the Senate to repeal recently finalized rules with a simple majority vote, rather than overcoming a filibuster with 60 votes.
- February 28, 2023: The resolution passed the House 216 - 204
- March 1, 2023: The Senate passed the vote 50-46, with Sen. Joe Manchin (D-WV) and Sen. Jon Tester (D-MT) joining their Republican colleagues to do so.
- March 20, 2023: President Biden vetos the legislation that he believes would have jeopardized the retirement savings of public employees across the country.
- March 20, 2023: House Republicans prepare to override the veto with a vote. Civics 101 Reminder: A veto override requires support from two-thirds of members in both chambers of Congress.
- March 23, 2023: House Republicans fail at their attempt to override the veto by a two-thirds majority (219-200), and so the veto stands.
Why this matters:
- For Republicans: ESG has become a hot-button issue for them in recent years. Their definition of ESG as the practice of “Woke Capitalism” threatens their view of traditional business practices.
- For Democrats: This bill was a tough vote. Manchin and Tester are both vulnerable Democrats in red states who are both facing a tough race for re-election next fall. By having this vote, it put them on record bucking their party.
The Big Picture: The veto by President Biden and the attempted override of the veto by House Republicans highlights the divisions between the two sides on ESG.
Contact Chelsea Neil at cneil@crefc.org with questions about this story.