Speaker Kevin McCarthy Signs Bill Killing Biden’s ESG Rule For Retirement Plan Investments

The Federalist ^ | 03/10/2023 | Victoria Marshall

[SeekAndFind]

“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. 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.

[SeekAndFind]

DOA when it gets to Biden's desk. Heck, it won't even get past Senate.

[Mouton]

It already passed the senate

[OHPatriot]

So What. Gridlock is not a bad thing. But then again Joey Crappy Pants has EO’s and pens to spare.

[SeekAndFind]

RE: It already passed the senate

Good to know. But Biden still has his veto pen. His puppet master will control him to reject it.

[Alberta's Child]

This is a lot of hysteria about nothing.

Biden’s ESG change to the fiduciary rule was just as stupid as Trump’s original fiduciary rule for retirement plans. In both cases, they treat Americans with investment accounts like pathetic children who can’t look out for themselves.

[SeekAndFind]

RE: Biden’s ESG change to the fiduciary rule was just as stupid as Trump’s original fiduciary rule for retirement plans

Can you remind us again what Trump’s fiduciary rule for retirement plans was?

[pgyanke]

Let me see if I understand the reasoning here... the Executive Branch can do whatever it wants and the only power residing in Congress is to pass a bill against it... that the Executive can veto? The king is alive and well!

So much for checks and balances...

[blackdog]

Now don’t pass anything until he signs it. Sue the administration every day on every regulatory breath they try to take. Do not waiver on this. If Biden can’t get his 10% on everything going forward, including the Ukraine ATM, he will sign it.

[pgyanke]

Trump didn’t have a fiduciary rule. He modified (for the better) a rule enacted under Obama.

[1Old Pro]

just as stupid as Trump’s original fiduciary rule

It's not Trump, it was originally Obama's DOL, then it was moved to the SEC under Trump.

[mikelets456]

“It already passed the senate”

50-46 in the senate for now....If it were passed by 2/3 in the house and Senate would it pass via “Veto proof majority”?

[SunkenCiv]

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[iamgalt]

I think your comparison is preposterous. ESG is a destructive nation killing tool. To compare shackling financial institutions with it with what Trump proposed is ridiculous and would have thought you know better.

[Alberta's Child]

I thought the 2010 Obama rule was overturned in a legal challenge. I believe the “Trump rule” mentioned in this article refers to those adopted in the 2017-18 period.

[pgyanke]

The Obama DOL rule was “controversial.” Trump modified it in a positive way. He didn’t dream up a rule of his own. I’m not sure of the court history.

[Alberta's Child]

I see nothing in the Biden ESG rule that shackles anyone.

By definition, a “fiduciary” is a person or company that is legally obligated to look out for someone else’s best interests. In an investment account, the account holder’s “best interest” is generally defined as getting the best rate of return for the account holder’s risk profile. If Investment Fund X gets an average return of 10%, and Investment Fund Y gets an average return of 6% for the exact old same investment horizon and risk profile, then any fiduciary advisor would be obligated to recommend Fund X to a client.

As I read it, all the “Biden ESG rule” does is this: It says an advisor in a fiduciary role can recommend Fund Y without breaching his or her fiduciary duty to the client as long as the recommendation is based on ESG-related nonsense.

Seriously … WGAF? If an investor is willing to accept an inferior investment because of some kind of silly ESG sh!t, then how is this the advisor’s problem?

For that matter, how does ANY of this require an advisor to function in a fiduciary role? In every retirement plan I’ve ever had, the advisors/administrators never made investment decisions on their own. They required the investors to give explicit instructions for each and every investment transaction. In other words, the only one who should be operating in a fiduciary role is ME.

[pgyanke]

I haven’t read the rule on my own, just read about it. It seems to mandate some ESG offerings within retirement plans... for example, as the default alternative. The government has no business mandating investments for anyone.

[Political Junkie Too]

In both cases, they treat Americans with investment accounts like pathetic children who can’t look out for themselves.

It's not about Americans who buy individual equities. It's about fund managers who manage ETFs or mutual funds that Americans buy instead of managing a portfolio of individual stocks themselves.

Sure, Americans can avoid those funds and buy and sell individual holdings, but that takes work.

-PJ

[Alberta's Child]

Or just choose your funds wisely. Each fund has a Morningstar rating and issues an annual, semi-annual or quarterly report. If some virtue-signaling doofus is willing to accept a 0.1% return in a fund because it’s “triple-gold-star ESG rated,” then what the hell do I care?

[jpp113]

There is a poster on this thread that despite his claims that "I was tired of draft-dodging Ivy League globalist pr!cks running this nation, he fully supports the globalist WEF woke crap of ESG and has no clue about Fiduciary Duty. A Fiduciary is someone that has a duty to ALWAYS look out for the client's best interest. Trying to foist a political ideology on the client instead of something in the client's best interest, whether or not the client accepts it, is a CLEAR BREACH OF FIDUCIARY DUTY.