ESG 401(k) Rule Survives House Attempt to Override Biden Veto

House Republicans failed in their effort to reverse President Joe Biden’s veto of legislation that would have blocked a US Labor Department Labor rule that permits socially conscious retirement investing.

The override attempt came up short with a 219-200 vote Thursday, with Rep. Jared Golden (Maine) being the sole Democratic defection. The vote didn’t reach the two-thirds majority threshold necessary to overturn a presidential veto.

On March 21 Biden rejected a bipartisan resolution that would have negated a DOL rule authorizing fiduciaries to consider environmental, social, and governance factors when investing for retirement accounts.

“Congress debated and it came to the bipartisan conclusion to overturn the Biden rule. Now, the administration persists through executive fiat,” said Rep. Virginia Foxx (R-N.C.), chairwoman of the Education and Workforce Committee, ahead of the vote during floor debate.

But Democrats shot back, saying the override attempt was useless given Republicans never had a veto-proof majority for the effort.

“Nobody made a convincing case that they can override the president’s veto, and that’s because it cannot be made,” said Rep. Bobby Scott (D-Va.), the top Democrat on the panel led by Foxx. “This current majority has a long way to go. However, the very least we should agree on is that we can’t afford to waste time on futile efforts we know won’t go anywhere.”

The resolution, sponsored by Rep. Andy Barr (R-Ky.), passed the House mostly along party lines, and garnered enough votes in the Senate with help from Democratic moderates Joe Manchin (W.Va.) and Jon Tester (Mont.). After failing to reverse the rule through legislation, the opponents of the ESG rule now look to the courts to weigh in.

More than two dozen red state attorneys general are suing the DOL’s Employee Benefits Security Administration, alleging the rule violates federal benefits law and administrative procedure.