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The U.S. Senate has rejected a Biden-backed socially responsible investing rule 50-46.
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Two Democratic senators up for reelection in 2024 joined Republicans in opposing ESG.
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It is likely to be a short-lived victory as neither chamber has the votes to override a promised veto.
Two wary Democratic senators joined a united GOP caucus in denouncing a Labor Department rule that allows for socially conscious investments by pension fund managers, a procedural loss the Biden administration can overcome with a promised veto.
Wednesday’s defectors, both facing tough reelections this cycle in states Donald Trump won by double digits in 2020, include Democratic Senator Joe Manchin of West Virginia and Jon Tester of Montana.
The duo joined the 48 Senate Republicans in attendance in tightening the DOL rule, allowing investment advisers to factor in “the economic impacts of climate change,” by voting against it 50-46.
The absence of Democratic senators Dianne Feinstein of California, Jeff Merkley of Oregon and John Fetterman of Pennsylvania left Senate Majority Leader Chuck Schumer three votes behind before deliberations began. Republican Sen. Mike Crapo of Idaho also missed all of Wednesday’s votes.
Congressional Review Act resolutions, such as those against the ESG rule, require only a simple majority vote, rather than the 60-vote threshold needed to break a standard filibuster.
Indiana Republican Senator Mike Braun, who led part of the multi-pronged effort to thwart Biden’s proposal and incite conservatives ahead of the 2024 election, told Insider he doubted the Senate or the House would support the two-thirds could collect a majority of the vote. every chamber to override the impending presidential veto.
But he said it feels “pretty good” to put Biden on the defensive.
“Biden will have to explain why he thinks it’s a good idea to introduce a rule that would give him a 30% lower return,” Braun said at the Capitol.
The GOP’s ongoing battle against environmental, social and corporate governance issues seeks to curtail the billions of dollars in ESG-related investments already flowing through state pension funds and personal 401,000 retirement accounts.
Detractors such as Republican Senator Ron Johnson of Wisconsin argue that considering ESG to any degree puts political ideology above financial returns.
Minnesota Democratic Sen. Tina Smith pleaded to disagree, telling colleagues on the Senate floor that the Biden rule “doesn’t force choices, it creates choices.”
There’s not much else Congress can do to counter ESG at this point, Braun admitted.
But he said all hope is not lost.
“The only other part of government that could come into play is the courts,” Braun said, raising the possibility that a Circuit Court or U.S. Supreme Court judge could intervene sometime later.
Read the original article on Business Insider
