Sens. Rick Scott & Mike Braun lead bipartisan challenge to Biden rule politicizing Americans’ 401(k)s
February 1, 2023
Senator Rick Scott joined Senator Mike Braun and 48 of their colleagues to announce their bipartisan challenge to President Biden’s environmental, social, and corporate governance (ESG) rule which politicizes millions of Americans’ retirement investments to favor Biden’s ideological preferences rather than getting the best returns for Americans.
Senator Rick Scott said, “Once again, Biden and his administration are putting their liberal priorities over the best interests of the American people by allowing ridiculous and illogical ESG policies into employer-sponsored retirement plans. This rule allows Wall Street fund managers to make choices on behalf of Americans based on their own beliefs and social agenda, not what’s financially sound. It jeopardizes the hard-earned nest egg millions of families rely on to retire comfortably. Families deserve better, and I’m glad to join my colleagues to fight this rule and reverse this horrible decision.”
Read more from Senator Mike Braun’s office below.
- A recent Biden rule allows fiduciaries to consider ideological factors when investing, rather than just rate of return
- “ESG” funds tend to have lower rates of return, meaning the Biden administration is jeopardizing 152 million Americans’ retirement to support their political agenda
- Senator Mike Braun and 49 other Senators are challenging this rule in the Senate, Representative Andy Barr is leading the challenge in the House
- A floor vote is guaranteed on this challenge, which can pass Congress with simple majorities in both chambers
WASHINGTON – Senator Mike Braun and 49 Senators will be introducing their bipartisan challenge to President Biden’s ESG rule which politicizes millions of Americans’ retirement investments to favor Biden’s ideological preferences rather than getting the best returns for Americans.
The Senators joining Senator Braun include every Republican Senator: Senate Republican Leader Mitch McConnell and Senators Thune, Barrasso, Blackburn, Boozman, Budd, Britt, Cassidy, Capito, Collins, Cornyn, Cotton, Cramer, Crapo, Cruz, Daines, Ernst, Fischer, Graham, Grassley, Hagerty, Hawley, Hoeven, Hyde-Smith, Johnson, Kennedy, Lankford, Lee, Lummis, Marshall, Moran, Mullin, Murkowski, Paul, Ricketts, Risch, Romney, Rubio, Rounds, Schmitt, Rick Scott, Tim Scott, Sullivan, Tillis, Tuberville, Vance, Wicker, Young. Senator Joe Manchin joins on the Democratic side.
Representative Andy Barr is leading the House version of the legislation.
In November, President Biden instituted a rule that explicitly permits ERISA retirement plan fiduciaries to consider environmental, social, and corporate governance (ESG) factors when selecting investments and exercising shareholder rights.
This Biden rule replaces a previous rule which mandated fiduciary decisions be made solely on getting the best returns for the 152 million American workers that depend upon ERISA for their retirement. Because ERISA covers most employer-sponsored retirement plans, we’re talking about $11.7 trillion in assets here.
Under Biden’s rule, retirement fund managers can prioritize ESG factors instead of financial returns in their investment decisions for workers’ hard-earned savings. Plan participants could unknowingly be enrolled in ESG funds, which may not align with their political views. In the most recent survey, most Americans think it’s a bad idea for companies to use their financial influence to advance a political or social agenda, as is the case in ESG investing.
A number of studies have shown that ESG investing policies have worse rates of return. For example, a study by UCLA and NYU found that over the past five years ESG funds underperformed the broader market, averaging a 6.3% return compared to 8.9% return respectively. Additionally in comparison to other investment plans, ESG investors generally end up paying higher costs for worse performance.
This disapproval resolution will receive a vote on the Senate and House floor. Under House and Senate rules, Senator Braun and Representative Barr will be able to force a vote on this resolution to nullify the rule. Additionally, the resolution only requires a simple majority vote threshold to pass and be sent to the President.
Senator Mike Braun previously led a challenge to President Biden’s vaccine mandate for private businesses, which passed the Senate on a bipartisan vote. When the U.S. Supreme Court struck down Biden’s mandate for being unconstitutional, the majority decision cited Senator Braun’s challenge under the Congressional Review Act as a significant reason for their decision.
“President Biden is jeopardizing retirement savings for millions of Americans for a political agenda. 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. That’s why we are proud to stand up against this rule for the millions of Americans who depend on these funds for their retirement.” – Senator Mike Braun
“Retirement plans should be solely focused on delivering maximum returns, not advancing a political agenda. 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. It’s time for Congress to act and I applaud Senator Braun and our colleagues for renewing this fight.” – U.S. Congressman Andy Barr (R-KY), Chairman of the House Financial Services Subcommittee on Financial Institutions and Monetary Policy
“Wyoming families are already facing record-high prices at the hands of President Biden. He is now prioritizing a far-left political agenda over Americans’ savings. Republicans will continue to push for policies that help Americans save for a more secure retirement – not bow to the interests of radical extremists.”—Senator John Barrasso
“The Biden administration is doing everything in its power to force radical ESG policies on the American people. I am proud to join my colleagues in introducing this resolution of disapproval that would take the U.S. Department of Labor out of the ESG business and put Americans’ retirement security first.”—Senator John Thune
“People in Wyoming want their 401(k)s to prioritize the best investments possible. The Biden administration’s attempt to politicize their retirement funds is short-sighted and is costing retirees their hard earned money that they rely on to retire. Fiduciary decisions should be made solely on investment returns, not woke priorities that leave retirement accounts less valuable and less stable. I’m glad to join my colleague Senator Braun in highlighting this important issue.” — Senator Cynthia Lummis
“President Biden’s attempt to use Americans’ retirement plans to bankroll the woke agenda is fiscally irresponsible and morally wrong. Congress must reject this rule before American families suffer even more just so that Biden can support the Left’s pet projects.”—Senator John Kennedy
“Democrats are implementing their destructive agenda into every aspect of our lives, including investment decisions of 401(k) plans. Record-high inflation – driven by the Biden administration’s out of control spending – wiped out the wage gains of working families and hurt seniors on a fixed income. This rule jeopardizes Americans’ retirement savings to promote the lefts’ political agenda. I’m proud to support my colleagues in rejecting the Biden administration’s assault on Americans’ financial security.” – Senator Ron Johnson
“Americans who work today and save for tomorrow need to optimize their returns to afford life in retirement. Political agendas like Joe Biden’s ‘woke’ ESG requirements pressures financial experts to shift potential gains away from American retirees and into Joe Biden and the Department of Labor’s political projects. These efforts harm Americans saving for retirement by pressuring investing specialists to use Americans’ life savings to fund the radical agenda in the White House.” – Senator Shelley Moore Capito.
“The Biden administration continues to promote their liberal agenda at the American people’s expense. President Biden’s Department of Labor wants to jeopardize workers’ hard-earned retirement savings at a time when they are already suffering under the crushing weight of record inflation. Fiduciaries are legally required to put clients’ interests first, not gamble their 401(k)s on progressive priorities. Continuing on this path is not sustainable, and the people in our country deserve better.”—Senator Mike Rounds
“The retirement savings of millions of Americans shouldn’t be tied to a far-left political agenda. I strongly oppose the Biden Administration’s ESG rule and urge my colleagues to support this disapproval resolution.”—Senator Todd Young
“I commend Senator Braun for leading this fight to push back against the Biden administration’s woke policies that are inflicting enormous pain on America’s working families, particularly in my state of Alaska. Alaskans know firsthand just how destructive these policies have been for our economy, especially when it comes to this administration’s war on American energy producers and their efforts to pressure Wall Street banks not to invest in energy development projects. Now, the administration wants to weaponize American retirement funds in this pressure campaign, all at the expense of retirees’ bottom lines. That is why I am pleased to join my colleagues in this fight to stop the Biden regime from raiding the retirement funds of hard-working Americans all in the name of promoting a far-left agenda that the American people do not support.” – Senator Dan Sullivan
“Most Americans are rightfully shocked by the hits their retirement savings have suffered over the past two years, losses that could be compounded by President Biden’s rule to prioritize underperforming progressive ESG funds. The administration and Congress should be doing everything they can to maximize retirement savings rather than forcing ill-advised policies that could diminish those nest eggs.” – Senator Cindy Hyde-Smith
“Allowing the imposition of subjective standards by retirement plan fiduciaries threatens the savings and life’s work of millions of Americans. I will continue to fight this misguided action by the Biden Administration.”—Senator Mike Crapo
“Once again, Biden and his administration are putting their liberal priorities over the best interests of the American people by allowing ridiculous and illogical ESG policies into employer-sponsored retirement plans. This rule allows Wall Street fund managers to make choices on behalf of Americans based on their own beliefs and social agenda, not what’s financially sound. It jeopardizes the hard-earned nest egg millions of families rely on to retire comfortably. Families deserve better, and I’m glad to join my colleagues to fight this rule and reverse this horrible decision.”—Senator Rick Scott
“President Biden and his administration are clearly more concerned with furthering the radical left’s anti-American agenda than they are with supporting American workers and their hard-earned retirement savings. I’m proud to join Sen. Braun and Rep. Barr in efforts to protect the retirement savings of Kentuckians and workers nationwide that have already been subjected to the repercussions of Biden’s reckless economic policies.”—Senator Rand Paul
“At a time when our country is already facing economic uncertainty, record inflation and increasing energy costs, it is irresponsible of the Biden Administration to jeopardize retirement savings for more than 150 million Americans for purely political purposes. I’m proud to join this bipartisan resolution to prevent the proposed ESG rule from endangering retirement incomes and protect the hard-earned savings of American families. I encourage my colleagues on both sides of the aisle to support this important resolution to ensure Congress is promoting economic security for West Virginians and Americans, not further exacerbating the serious economic challenges they are already facing.” – Senator Joe Manchin
“President Biden should stop playing politics with Americans’ hard-earned retirement savings. Families continue to struggle to pay their bills as prices soar. Prioritizing woke nonsense will only put them into an even deeper hole.”—Senator Marco Rubio
“Millions of Americans need their hard-earned retirement savings to go as far as possible. At a time when budgets are already stretched incredibly thin thanks to rampant inflation, the last thing the Biden administration should be doing is elevating any effort to undermine financial security by emphasizing investment factors other than risk and return. Hard-working Arkansans want their money working for them, and focusing on anything else is a distraction. I’m proud to join my colleagues to challenge this irresponsible rule.”—Senator John Boozman
“After burdening hardworking Americans with trillions of dollars in new federal spending and record high inflation, President Biden is now placing retirement savings at risk in the name of inclusion and climate change. This is the left’s latest attempt at transforming our nation to further their woke agenda. It must be stopped.”—Senator Marsha Blackburn
“President Biden will do anything to force his extreme, progressive policies on the American people, regardless of the consequences. Inflation caused by his agenda has taken money out of every American’s pocket, and now, President Biden wants to rob retirement accounts by allowing woke financial managers to consider ESG factors when investing the savings of hardworking Americans. Retirement account investing should focus on maximizing economic returns — not pushing progressive social policy.”—Senator Tommy Tuberville
“Millions of hardworking Americans are counting on their retirement savings to carry them through their golden years. But rather than promote sound investments to ensure the greatest retirement growth, the Biden Administration wants to allow money managers to put their own political agendas and pet projects over their clients’ savings. This reckless, partisan social experiment demonstrates this administration’s disregard for Americans’ hard-earned savings, and it can’t be allowed to stand.” – Senator Chuck Grassley
“The Biden administration is jeopardizing Idahoans’ retirements with its woke agenda. When Americans put their retirements into the hands of a retirement fund manager, they must make the best investment decisions possible for that American. The personal political viewpoints of that manager should play zero role in those decisions, but the Biden administration created a new rule that enables investors to make financial decisions with your money based on their views, not yours. This rule has massive ramifications for the American people, and, as such, Congress must be empowered to vote on it. Through this Congressional Review Act, the Senate will be forced to take a stand on whether retirement fund managers can prioritize political viewpoints over financial outcomes when investing the retirements of others.”—Senator Jim Risch
“Political preferences should have no place in determining Americans’ retirement funds. It’s sadly not surprising that the White House is using their latest environmental, social, and governance (ESG) push to force their ‘woke’ agenda into every part of our lives, but it should not be at the cost of Americans’ retirement. Americans should not have to turn over their retirement savings to left-wing activists.”—Senator James Lankford
“Fiduciaries should be focused on retiree’s stability and rates of returns. President Biden’s rule is a favor for his liberal friends on Wall Street by inserting environmental, social, and corporate governance (ESG) into what should be solely financial decisions. This practice is unfair to taxpayers and legal commerce alike. At a time of market volatility and fluctuating inflation, we should be protecting, not destabilizing Americans’ retirement plans.”—Senator Kevin Cramer
“Politicizing retirement returns is a radical move by Biden and Senate Democrats that puts the financial stability of Montanans further at risk. Montanans are already struggling to make ends meet under the crushing weight of the Democrats’ reckless spending and inflation crisis – they should not have to pay the price for the whims of wokeness with their hard-earned life savings. Financial advisors’ responsibility is to investors, not the woke mob.”—Senator Steve Daines
“Retirement accounts should be off-limits to woke activists. It is wrong for President Biden to sacrifice Americans’ financial security to implement his radical agenda.”—Senator Roger Wicker
“Hundreds of millions of Americans’ retirement funds have taken a hit in our current economy. The Biden Administration’s recent ESG rule would pose further risk to these retirement funds by forcing fiduciaries to use Americans’ hard-earned money to advance social causes rather than investing to get the best returns. Americans’ retirement is not something to play political games with.”—Senator Mitt Romney
“Retirement fund managers have a fiduciary responsibility to their clients to maximize their investments and retirement savings. Now, by continuing to push his progressive green agenda, President Biden is jeopardizing the money Americans have worked their entire careers for by pushing savings into left-wing ESG governance funds. With inflation already eating away at retirement savings, this Rule is completely misguided and I’m proud to support Senator Braun’s legislation that prioritizes responsible investments over woke politics.”—Senator Roger Marshall
“Retirement plan investments should prioritize returns, not political preferences. The Biden administration is risking Americans’ retirement savings by propping up ESG-focused funds. This rule should be overturned.”—Senator Tom Cotton
“This ESG rule proposed by the Biden Administration will financially punish millions of Americans by putting their retirement savings at risk. Hard-working Americans have seen their retirement savings plummet due to the Biden Administration’s economic policies, and it is critical that fiduciaries prioritize maximizing returns as opposed to the ESG liberal agenda. I am proud to work with my colleagues to challenge this proposed rule, protect Americans’ hard-earned retirement savings, and hold the Biden Administration accountable for its out-of-touch liberal economic agenda.”—Senator Thom Tillis
“The Biden administration shouldn’t be playing games with Americans’ hard-earned retirement funds. I’m proud to join my colleagues in pushing to overturn this misguided rule that could hurt the financial security of millions of Americans.”—Senator Deb Fischer
“The Biden administration’s reckless ESG rule proves that nothing is off limits when it comes to Joe Biden’s radical green agenda – even Americans’ hard-earned retirement savings. This new rule will put Americans’ savings at the mercy of asset managers pushing the woke ESG movement, regardless of low return rates or participant awareness. During a time of record inflation, it’s more important than ever that Republicans condemn ‘woke’ policy measures that threaten the ability of hard-working families to save for retirement. I’m proud to stand with my colleagues to challenge this rule and protect Americans’ savings from the Biden Administration’s bankrupting political agenda.” – Senator Markwayne Mullin
“Hardworking American families, retirees, and small businesses are already being crushed by generationally high inflation fueled by the Biden Administration’s wasteful tax-and-spend spree and reckless Green New Deal agenda. Now, the President wants 152 million Americans to take an additional financial hit to their hard-earned retirement savings to further a leftwing political agenda. Fiduciaries have an obligation to put the financial wellbeing of their investors first – not political whims.”—Senator Katie Britt
“Nebraskans don’t deserve to sacrifice their retirement savings for a woke federal mandate from President Biden. These ESG funds have a lower rate of return that will result in a poorer quality of life, making it harder for grandparents to see their grandkids and leaving families with less flexibility as they plan for their future.” – Senator Pete Ricketts
“The Biden Administration’s new ESG rule will put Missourians and Americans’ hard-earned retirement savings at risk – millions of retirement plans and trillions of dollars could be put into jeopardy, purely because the Biden Administration wants to virtue signal. I will always prioritize the best interests of hardworking Missourians over the demands of climate activists.”—Senator Eric Schmitt
“The Biden Administration continues to push ESG policies on the American people. This CRA is all about stopping Biden’s Labor Department from prioritizing progressive priorities at the expense of hardworking Americans’ retirement savings.” - Senator John Hoeven.
This disapproval resolution is endorsed over 100 groups so far:
60 Plus Association, Able Americans, Advancing American Freedom, AdvanceUSA, Alaska Policy Forum, ALEC Action, AMAC Action, America First Policy Institute, American Association of Senior Citizens, American Accountability Foundation, American Commitment, American Family Association, American Policy Center, American-Chinese Fellowship, Americans for Limited Government, Americans for Prosperity, American Securities Association, Americans for Tax Reform, The Buckeye Institute, Caesar Rodney Institute, The Capitalist League, Center for a Free Economy, Center for Freedom and Prosperity, Center for Individual Freedom, Center of the American Experiment, Christian Employers Alliance, Climate Science Coalition of America, Club for Growth, The Conservative Caucus, Conservatives for Property Rights, Competitive Enterprise Institute, Concerned Women for America, ConservativeHQ.com, Discovery Institute, Domestic Energy Producers Alliance, Eagle Forum, Eagle Forum of Georgia, Enterprise Supporting Climate Science, Fair Energy Foundation, Family PAC Federal, FedUp PAC, ForAmerica, Former Speaker of MO House of Representatives, Former Speaker of NC House of Representatives, Foundation for Government Accountability, FreedomWorks, Frontiers of Freedom, Goldwater Institute, Heartland Institute, Heritage Action, Independent Women's Voice, Institute for Liberty, Institute for the American Worker, Institute for Policy Innovation, The James Madison Institute, John Locke Foundation, Kentucky Coal Association, Leadership Institute, Less Government, Life:Powered, Media Research Center, Member of KY House of Representatives, Member of LA House of Representatives, Member of WV House of Delegates, National Center for Public Policy Research, NSIC Institute, NSSF, NYS Conservative Party, Ohio Coal Association, Orthodox Jewish Chamber of Commerce, Patriot Voices, Pelican Institute, Pennsylvania Coal Alliance, Penobscot County Commissioner (Maine), Phyllis Schlafly Eagles, Pine Tree Public Policy Institute, Project 21 Black Leadership Network, Quantum Communications, Reliable Energy, Inc., Rhode Island Center for Freedom & Prosperity, Rio Grande Foundation, State Financial Officers Foundation, State Freedom Caucus Network, States Trust, State Treasurer of Arizona, State Treasurer of Indiana, State Treasurer of Kentucky, State Treasurer of Louisiana, State Treasurer of Mississippi, State Treasurer of Utah, State Treasurer of West Virginia, Taxpayers Protection Alliance, Texas Public Policy Foundation, Texas Mining and Reclamation Association, TrendMacro, Truth in Energy and Climate, Western Energy Alliance, West Virginia Coal Association, Wisconsin Institute for Law and Liberty, Yankee Institute, Young Conservatives of Texas
COALITION LETTER OF SUPPORT (Led by Advancing American Freedom):
Protect Americans’ Savings from Ideological Embezzlement
Support the Braun/Barr CRA Resolution on ESG
To Members of Congress:
Each year, millions of new Americans retire from their jobs. Most of these retirees will have spent decades working hard to save as much money as they are able to in order to sustain them through a decade or more of retirement. The savings these Americans rely on are often managed by employer-sponsored plans (such as 401ks), for which the federal government established minimum standards and safeguards in the Employee Retirement Income Security Act of 1974 (ERISA).
A pernicious practice known as Environmental, Social, and Governance (ESG) investing has emerged over the past several decades. Rather than prioritize the financial well-being and stability of retirees, ESG seeks to advance ideological goals related to environmental policy and other divisive subjects. While it is a tenet of a free society that people ought to be able to use their own money as they see fit (including advancing their own particular priorities), ESG is a misappropriation of retirees’ savings by money managers for their own political agendas. Most Americans think it’s a bad idea for companies to use their financial influence to advance a political or social agenda, as is the case in ESG investing.
Forcing Americans into ESG investment is not only politically inappropriate, it is also financially irresponsible. According to research from the University of Chicago, mutual funds scoring highly on ESG factors are constantly outperformed by funds rated lowest for ESG. Moreover, 85 percent of the country does not even know what “ESG” is, and therefore would not be aware of the financial risks their retirement account managers are subjecting them to when they actively pursue ESG investment decisions.
Under the Trump-Pence administration, the U.S. government protected retirees from this kind of abuse by issuing a rule clarifying that, under ERISA, the managers of retirement funds could not engage in ESG investment if it would have a negative impact on retiree’s savings or expose them to additional risks (“Financial Factors in Selecting Plan Investments”).
Tragically, on November 22, 2022, the Biden administration chose to undermine the Trump-Pence safeguards by issuing their own ERISA rule that would make it easier for retirement fund managers to imperil retirees’ savings. With 22 percent of Americans set to be relying upon their retirement savings and benefits in 2050, this policy of misappropriation cannot be allowed to stand.
Fortunately, Congress can overturn the Biden administration’s dangerous ESG rule through the Congressional Review Act (CRA). Under the CRA, the new Congress can review and disapprove of rules issued in the last 60 days of the previous Congress. There is a limited lookback period authorized under the CRA, so it is critical that Congress act quickly.
Senator Mike Braun and Representative Andy Barr have introduced H.J.Res.[# TBD] / S.J.Res. [# TBD], which would block Biden’s ERISA rule and protect Americans from dangerous investment management practices. We, the undersigned organizations, are calling on every member of the United States Congress to support this resolution and stop Biden’s ideological embezzling of Americans’ retirement accounts.
Advancing American Freedom
American Accountability Foundation
American Policy Center
Chief Government Affairs Officer
Americans for Prosperity
Americans for Tax Reform
Fellow, Energy and Environmental Policy
Center of the American Experiment
Dr. Steven J. Allen (J.D., Ph.D.)
The Conservative Caucus
Jerry R. Simmons
Domestic Energy Producers Alliance
Kristen A. Ullman
Heritage Action for America
Heather R. Higgins
Independent Women’s Voice
F. Vincent Vernuccio, J.D.
Institute for the American Worker
Director, Free Enterprise Project
National Center for Public Policy Research
Lawrence G. Keane
SVP Government and Public Affairs
Director of Membership Development
Project 21 Black Leadership Network
Rio Grande Foundation
Kathleen M. Sgamma
Western Energy Alliance
American Enterprise Institute
E. Calvin Beisner, Ph.D.
Cornwall Alliance for the Stewardship of Creation