U.S. Rep. Andy Barr (R-KY), along with dozens of Republican colleagues in both chambers of Congress, plans to reintroduce a joint resolution that would invalidate a federal rule designed to make it easier for employers to consider climate change and other environmental, social, governance (ESG) factors when picking investment funds for their 401(k) plans.
The joint resolution of disapproval would nullify a U.S. Department of Labor final rule published in the Federal Register on Dec. 1, 2022 that permits, but does not require, ESG strategies to be used in federal retirement plans. The rule became effective on Jan. 30.
Republicans say that the final rule loosens regulations put in place in 2020 during the Trump administration around ESG funds for 401(k) plans and jeopardizes the retirement savings for millions of Americans for a political agenda.
“Retirement plans should be solely focused on delivering maximum returns, not advancing a political agenda,” Rep. Barr said on Feb. 1. “If Congress doesn’t block the Department of Labor’s rule greenlighting ESG investing in retirement plans, retirees will suffer diminished returns on the investment of their hard-earned money.”
A joint resolution of disapproval filed under the Congressional Review Act permits Congress to revoke a regulation from the executive branch. Just like a proposed bill, such resolutions must be approved by both chambers and then signed into law. They also would require a two-thirds majority of each house to override a presidential veto.
U.S. Sen. Mike Braun (R-IN) is again leading the companion measure in the U.S. Senate. Every Republican senator, as well as U.S. Sen. Joe Manchin (D-WV), is set to support the joint resolution.
“President Biden is jeopardizing retirement savings for millions of Americans for a political agenda,” Sen. Braun said in a statement. “In a time when Americans’ 401(k)s have already taken such a hit due to market downturns and record high inflation, the last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons.”
“It’s time for Congress to act and I applaud Sen. Braun and our colleagues for renewing this fight,” said Rep. Barr.
Both Rep. Barr and Sen. Braun in December 2022 sponsored House Joint Resolution 103 and Senate Joint Resolution 68, respectively, providing for congressional disapproval under title 5 of the United States Code of the rule submitted by the Department of Labor relating to “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” according to the text of the identical joint resolutions.
However, both joint resolutions never made it out of the Democratic-led committees they were assigned to for consideration.