Key takeaways:
- President Joe Biden issued the first veto of his presidency on Monday, blocking a resolution to overturn a retirement investment rule.
- The Labor Department rule was finalized in October and is set to take effect in April, requiring retirement plan managers to consider environmental, social and corporate governance factors when selecting investments.
- The House of Representatives failed to override Biden’s veto, falling short of the two-thirds majority needed in each chamber to undo a presidential veto.
President Joe Biden issued the first veto of his presidency on Monday, blocking a resolution to overturn a retirement investment rule that allows managers of retirement funds to consider the impact of climate change and other environmental, social and governance factors when picking investments.
The bipartisan measure, which was sent to Biden by Congress this month, would have blocked a Labor Department rule allowing some retirement plans to weigh environmental, social and corporate governance factors when selecting investments, instead of focusing solely on the best rate of return.
On Thursday, the House of Representatives failed to override Biden’s veto, falling short of the two-thirds majority needed in each chamber to undo a presidential veto. The vote was 219-200.
The new administration rule for retirement plans will now be implemented as planned. Republican lawmakers had led the effort to overturn the investment rule, arguing it pushes a liberal agenda on Americans and will hurt retirees’ bottom lines.
The Labor Department rule was finalized in October and is set to take effect in April. It requires retirement plan managers to consider environmental, social and corporate governance factors when selecting investments, in addition to the traditional focus on rate of return. Supporters of the rule argue that it will help protect retirement savings from climate-related risks.
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