By SUZANNE DOWNING
Two wolves and a sheep decide what’s for dinner: That’s what the U.S. Department of Labor has done with American workers’ retirement accounts over the past few months.
Now that President Joe Biden’s ESG (Environmental, Social, Governance) rule has been officially published in the Federal Registry, Congress can review it and unwind it. The Congressional Review Act is the one weapon Congress has to keep the Biden Administration from wolfing down Americans’ 401(k)s.
The House and Senate must do so at their earliest convenience this week.
The CRA can be used anytime by Congress, but is usually tried after a change in administration, when an outgoing president promulgates 11th-hour rules, and when there is a shift in majority in the House and Senate that can undo those rules through the congressional review and disapproval process.
The ESG rule was issued by the Department of Labor. It encourages retirement fund managers to insert political bias into their investment decisions, in favor of environmental, social, and corporate governance ideals — a shifting goal — rather than profitability. The regulation is 180 degrees opposite of the intent of Congress when it created the rule that mandated that fund managers make decisions that protect the financial interests of clients.
The Employee Retirement Income Security Act of 1974 set parameters for most voluntarily established retirement and health plans in the private sector, with Congress aiming to protect individuals in these plans. ERISA allowed workers to trust their retirement fund managers, and trust is no small deal.
The Biden ESG rule allows these fund managers to instead take the retirement savings of millions of hard-working Americans and, rather than invest them for earnings, invest them with one or both eyes on political correctness, or for some shifting environmental or social engineering goal. The ESG rule puts a thumb on the scale for “woke” investments that have historically not done that well in the free market, but instead push a far-left political agenda, including things like Critical Race Theory, climate change, and the definitions of gender.
This new “Great Reset” rule allows retirement funds to essentially become independent expenditure groups that make businesses into the handmaidens of the left. Plan participants may unknowingly be enrolled in ESG funds that don’t align with their political views or investment strategies.
Sen. Mike Braun (R-Ind.), and all Senate Republicans have drafted a bipartisan joint resolution of disapproval under the Congressional Review Act to overturn President Joe Biden’s ESG rule. Sen. Joe Manchin, (D-WV) is apparently with them, and they need but a simple majority to pass a disapproval resolution. It is within reach in the Democrat-controlled Senate to get that majority.
In the House, a similar resolution is being advanced, led by Rep. Andy Barr (R-Ky.) Also in the House, a working group was formed this month to do a deeper dive into the hazards of ESG investing rules. The Republican Working Group, led by Oversight and Investigations Subcommittee Chairman Bill Huizenga (R-Mich.) will look at the threat to capital markets posed by ESG proponents.
Americans’ 401(k)s are already threatened by a related Biden proposal announced during his State of the Union address that will increase taxes on corporations because their shareholders are, in his view, making too much money. That proposed tax makes profit a bad thing and less profit means less earnings for retirement accounts, which are the shareholders Biden thinks are getting too rich.
The last thing Americans need is for their financial advisors to now take an ideological stand and decide that workers of America should be invested in high-risk, low-yield green companies. That’s never been the role of the fiduciary. The job is to protect the investor.
Sen. Dan Sullivan, (R-AK) describes it as raiding retirement accounts. It’s worse than that. This new rule shakes Americans’ faith in their financial institutions, and it takes away their rights as investors, rights that were, until November, protected under ERISA.
As the Senate reconvenes and the House returns from two weeks of meet-and-greets in home districts, readers will be seeing a lot more about the effort to eject — and the effort to protect — the ESG woke investing rule.
Democrats are wolves deciding that retirement funds are the lamb they are having for dinner. Only the Congressional Review Act that can keep those wolves at bay, for now.
Suzanne Downing is publisher of Must Read Alaska.
Can they? Certainly. Will they? That’s debatable.
I wonder what Representative Mary Peltola thinks about the rule. Will she vote to disapprove the rule?
Not a chance.
If she can allow retirement fund managers to toss good money after bad in an attempt to keep green energy/equity/deviant rights alive, she will take it in a second.
In December, we saw a $1.7 trillion pork pie omnibus appropriations bill passed by a Congress that had no time to read it.
Lost in all of this has been one spectacular giveaway: $100,000 per beneficiary of the Central States Pension Fund (CSPF).
They’ll save their buddies union pensions by draining yours.
Will somebody please explain to me what woke means? is it an acronym? does it mean like wakeup? Race?
As is typical of radical leftist Orwellian lingo, in reality “woke” means the precise opposite of what those who cling to the term think it means. To them, it means to be “awoken” to the unlimited faults and sins of traditional Western civilization. In actuality, the “woke” are those whose minds are most asleep.
They need to go back to sleep. Lack of sleep is impairing their judgement and making them cranky!!
Well if the U.S. Constitution and the Bill of Rights are faults and sins of our country, then I don’t want anything to do with ”woke”.
I am glad to hear that, 3rd.
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And yes, contempt and loathing for the US Constitution, the Bill of Rights, the Founding Fathers, and the moral and intellectual underpinnings upon which this nation was founded is all definitely part of what “woke” implies.
Supposedly…
If you are “woke” it means you have woken up to the injustices of the world. That you have awakened from the slumber of indifference.
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In reality, anyone who claims to be “woke” is just using it as an excuse to bully people around. They are right, you are just still asleep. When you wake up, you will understand what they understand, and will agree with them.
In other words, it is a way to stay in LALALAND while pretending that you are, in fact, awake. And, you get to push the easily influenced around.
Not an effective troll.
It is a luxury of a wealthy nation to care about ESG.
And, when you put ESG before maintaining and building that wealth, you will lose both the wealth and whatever environmental, social, or corporate governance you are seeking.
We should take our money and start are own fund and put it into what ever makes the most money. The PFD fund has done very well and any bank supporting this should loose accounts if people cared about their money. This is a ruse from the feds to get hold of more money something is smells fishy like Biden.
Two wolves and a sheep decide what’s for dinner: that’s the definition of ” Democracy “.
– M.John
Americans retirements have already been robbed by fjb and his congress.
Good article Suzanne.
Think of the hit Americans have already taken due to Biden being elected. His policies have done a lot to destroy the wealth Americans have built up. Inflation continues to rage, energy prices are vastly higher under Biden, and housing costs (rent and mortgages) are much higher. This, due to much higher interest rates, and higher rents as a consequence of Biden allowing millions to come into our country illegally.
Every time Biden makes a decision, it is designed to hurt Americans.
You mean, M, every time Biden’s globalist puppetmasters make a decision in his name, it is designed to hurt Americans. The empty husk that is Spongebrain Fullpants is probably not even making the decision on which flavor of ice cream he is going to have on any given day.
Wait till Biden figures our how to go after the PFD which is just a matter of time
There just are not enough people getting the PFD to be on his radar right now.
Taxing the life out of the service industry by sicking the IRS on tips and gratuities. Now, that is a population of significant enough size to make a difference.
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Perhaps you were wondering why the IRS needed 87,000 new agents?
Anti-trust and RICO are effective tools against ESG. Having the Biden regime issue a rule in support of ESG to prop it up will only make it harder to get rid of it. Cheers –
“The 2022 Biden Rule largely reaffirms the Department of Labor’s longstanding position, compelled by binding Supreme Court precedent, that an ERISA fiduciary may use ESG investing to improve risk-adjusted returns but not to obtain collateral benefits. Subject to a few nuanced changes of limited practical import, the Biden Rule is largely consistent with the 2020 Trump Rule and earlier regulatory guidance.”
‘https://corpgov.law.harvard.edu/2023/02/02/esg-investing-after-the-dol-rule-on-prudence-and-loyalty-in-selecting-plan-investments-and-exercising-shareholder-rights/
Starting with the Clinton administration Democrats have always had their eyes on pension funds and private retirement accounts. Looks like their dreams may be coming true. Climate change, income inequity and the war in Ukraine will be their excuse for the theft of the peasants’ life savings!
Investments are already at great risk in our faltering economy. Now this . . . The Dementia Patient is just making everyone work twice as hard to maintain our nation’s strength. The past 2 years have been ridiculous.
Democrat here: If you agree with this article that profits should be placed above all else, let me ask you this: If I paid you $1 to dump my garbage on your front lawn, would you take it? If not, then you aren’t putting profits above all else and you agree with Joe Biden’s proposal to NOT invest in this type of harmful industry activity just to make a buck.
Only a liberal could formulate this argument. You completely lack an important little element of the idea……context.
“ The ESG rule was issued by the Department of Labor. It encourages retirement fund managers to insert political bias into their investment decisions, in favor of environmental, social, and corporate governance ideals — a shifting goal — rather than profitability.”
You clearly don’t have a 401k that you are building, if you did, you’d be rightly pissed that the managers of said fund are funneling it into unproven untenable and insecure green energy upstarts that are risky at best and decades from profitability at worst. Look up a company called Solyndra.
Not to mention pouring money into black owned businesses simply because they are black owned, which is like saying I only spend with the Jews.
Just because it’s black owned doesn’t make it a good business or one guaranteed of success. “Despite buy-black campaigns, grants and other resources, 8 out of 10 Black-owned businesses fail within the first 18 months.”
‘https://www.cnbc.com/video/2021/02/03/covid-george-floyd-protests-spiked-black-owned-business-failure.html
Also, if I paid you to dump your garbage in your own yard would you take it? I mean I’d be paying to keep trash out of the landfills, and that’s good for the environment right? Wouldn’t you like to be one of the ESG companies that Biden is subsidizing?
Yeah I didn’t think so.
It’s sad you fight for things you don’t fully understand. The Biden rule is not a restriction or requirement. It’s removing a regulation put in place by Trump. Trump shackled investors, forcing them to only consider financial factors. Biden allows these managers to now consider environmental and social impacts as well as financial performance. It gives them more options, not less. More freedom in their decision making. It still requires investment decisions to be based on traditional financial factors, but it removes Trump’s regulation shackles. But go back to sleep. Sorry I woke you.
Side note: I don’t have a problem with landfills, per se. What makes you think keeping trash out of landfills is good for the environment? I think it’s a good idea to consolidate our garbage rather than spread it out. But it would obviously be better to reuse, reduce and recycle garbage so there is less of it.
Allows them to consider??
Uhhhh yeah they always been allowed to consider there princess, what this does is incentivize social equity over profitability.
I don’t want my 401k squandered on social correctness versus gaining value because of woke ideology.
You clearly did not even read this article. Take another Xanax or dose of copium and go back to the ivory tower for some long needed meditation,realization, comprehension,etc
You’re just wrong. You’re swallowing this opinion article’s spin. But I guess as a likely Fox viewer, you’re used to swallowing Fox News lies. (I’m sure you’re aware of the $1.6 billion lawsuit against Rupert Murdoch, Hannity, Tucker, Ingram and other Fox ilk admitting internally that Trump’s stolen election was all bs while continuing to report it as truth… typical).
At the end of 2020, the Trump administration implemented regulations preventing retirement investment firms from considering environmental or social impacts. They could no longer offer such plans to businesses and workers. Plans were given deadlines to comply. It caused massive backlash in the industry at the time.
Biden is removing those regulations thereby allowing investment firms more freedom in their decision making and giving investors more options. But you can still go ahead and keep investing your retirement funds in those high profit coal factories, because who gives a $#!t about your grandchildren’s lungs, right?
Do a little research and stop accepting opinion pieces as fact. Wake up.
Libby Libby, I’m going to have to take issue with you and your assertion. The Trump administration discouraged the ESG investment approach for fund managers but did not ban it outright. The rules The said that fiduciaries of private pension plans in ERISA could not provide investments in ESGs that sacrificed investments returns. Since you are now seen as a purveyor of misinformation, you are going into time out. – sd
Foolishness.
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