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George Rasley, CHQ Editor

Congress Slaps Down Biden’s Woke 401(k) Raid

Wednesday night, principled limited government constitutional conservative Republican Senator Mike Braun’s challenge to President Biden’s ESG rule that puts woke politics over profits for Americans’ 401(k)s passed the U.S. Senate.

Senator Braun led every Republican Senator and Senator Joe Manchin as cosponsors on this challenge. Democratic Senator Jon Tester of Montana joined in voting against the Biden rule.


Biden’s rule, which went into effect in February, allows fiduciaries to invest based on ESG factors – which tend to favor President Biden’s political priorities, but produce a lower rate of return. Previously, fiduciaries could only invest based on the best rate of return for their clients. This rule applies to employer-sponsored 401(k)s, meaning 152 million Americans are subject to the new Biden rule.


And as our friend economist Stephen Moore explained in a January column, the Biden ESG investing rule will permit money managers to play politics with trillions of dollars of people’s retirement savings, by pushing environmental, social and governance investing, which allows retirement fund managers to select stocks of companies based on their positions on social and environmental issues.


Put simply, said Mr. Moore, retirement savings will be used as leverage to force companies to reduce their carbon emissions and establish racial and gender quotas and other social justice fads completely unrelated to securing a high return on workers’ lifetime savings.

For example, noted Moore, to reduce greenhouse gases, money managers have divested in traditional oil and gas companies such as Exxon or Chevron. How has that worked out so far? Last year, these were two of the highest-performing stocks.


Moore cited Terrence Keeley, a former executive at BlackRock, who blew the whistle on this scam in the Wall Street Journal by noting that since 2017, when the ESG fad took hold, these funds have had an annual rate of return of 6.3% — versus 8.9% for the stock market as a whole. Investors lost 2.6% per year on their retirement funds. There goes the down payment on that retirement home in Arizona or Florida.


What is insidious about the new Biden administration ESG rules is that they permit and even tacitly encourage portfolio managers at firms such as BlackRock to violate their fiduciary duty to their clients by allowing ESG factors to trump sound investment decisions. Federal regulators are supposed to be ensuring the soundness of retirement funds, not shrinking them.

The Senate passed the measure pulling the plug on Biden’s executive order on a bipartisan vote of 50 to 46. It now goes to President Biden’s desk, where it is anticipated it will be his first veto: a bipartisan, bicameral rebuke of a major policy goal for the president.


Twenty-five states, including Sen. Braun home state of Indiana, are suing the Biden administration over this policy.

Senator Braun released this statement following his win on the Senate floor:


“My message to the White House is simple: Keep your hands off Hoosiers’ 401(k)s. President Biden is putting Hoosiers’ retirement savings at risk by changing the rules to allow money managers to invest based on progressive political goals rather than on the best rate of return. So many Americans’ retirement savings are already taking a hit from his inflation crisis,” said Senator Braun. “President Biden will now receive a searing, bipartisan rebuke of his policy that’s going to hurt Americans’ retirement savings.”


Representative Andy Barr led the House version, which passed on a bipartisan vote of 216 – 204 on Tuesday.



  • Congress

  • ESG investing

  • Jon Tester

  • Joe Manchin

  • Republican House

  • retirement investing

  • 401 (k) investments

  • Senator Mike Braun

  • Biden ESG investments

  • Terrence Keeley Blackrock

  • Biden administration ESG rules

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3 komentarze


helbergja
03 mar 2023

One might hope the money managers are paying attention, too, even it Biden vetoes the bill. Investors might just rise up. Where's Carl Icahn when you need him?

Polub

Charles Wilkins
Charles Wilkins
03 mar 2023


Polub

kenmarx
03 mar 2023

They can't override a veto, but they have made a statement. Democrats need to wake up and notice. If the next election is conducted honestly, the Dems will experience a bloodbath of their own making.

Polub
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