Joe Biden is set to issue his first veto in his presidency after two Democratic senators sided with Republican lawmakers to oppose a White House rule that would allow fund managers to consider environmental, social and governance factors in investment decisions.
Jon Tester, a Democratic senator from Montana, said Wednesday afternoon that he will join fellow Democrat Joe Manchin in voting to roll back a U.S. Department of Labor rule that allows pension plan fiduciaries to include ESG considerations in their investments.
“At a time when working families are dealing with higher costs, from health care to housing, we need to focus on making sure Montanans’ retirement savings are on the strongest footing possible,” Tester said in a statement. “I oppose this Biden administration rule because I believe it will destroy the retirement accounts of working Montanans and is wrong for my state.”
The move underscores the growing influence of conservatives in Washington, after Democrats lost control of the House of Representatives in last November’s midterm elections, ushering in a new era of divided government. It also points to the challenges facing Biden’s party in next year’s election.
Tester, who has served in the Senate since 2007, faces a tough re-election battle in 2024. Former president Donald Trump defeated Biden in Montana by a margin of nearly 17 points in 2020. Manchin, who represents the Republican stronghold of West Virginia, is also up for re-election. next year, but has not said that he will seek another term in office. Trump beat Biden in West Virginia by nearly 40 points in 2020.
The Senate, which is controlled by Democrats by a slim margin, voted 50-46 in favor of the measure on Wednesday evening. The resolution has been approved by the Republican-controlled House of Representatives, meaning it now heads to the White House. Administration officials said Biden wants to veto the measure, which would be the first veto of his presidency.
“Republicans talk about loving free markets, small government and letting the private sector do the work. The Republican bill is that [the] vice versa. Force the ideology of the Maga Republic down their throats [the] private sector,” White House press secretary Karine Jean-Pierre told reporters Wednesday, a reference to Trump’s “Make America Great Again” slogan.
While Biden’s veto would effectively kill efforts to roll back labor department rules, Congressional approval of the measure still underscores Republicans’ new ability to exert influence and amplify their message in Washington.
The National Republicans have made the opposition to ESG a main pillar for voters. Ron DeSantis, Florida’s governor and possible presidential candidate, has banned fund managers for the state’s pension system from including ESG factors in decision-making.
Trump, the current presidential candidate for his party’s presidential nomination in 2024, has also pledged to end the practice, while anti-ESG fund manager Vivek Ramaswamy last week launched his own long bid for the White House.