Young, Braun Introduce Bipartisan Challenge to President Biden’s ESG Rule
WASHINGTON, D.C. — U.S. Senators Todd Young (R-Ind.) and Mike Braun (R-Ind.) joined their colleagues in introducing a bipartisan challenge to President Biden’s ESG rule which politicizes millions of Americans’ retirement investments to favor far-left ideological preferences rather than getting the best returns for Americans.
In November, President Biden instituted a rule that explicitly permits Employee Retirement Income Security Act (ERISA) retirement plan fiduciaries to consider environmental, social, and corporate governance (ESG) factors when selecting investments and exercising shareholder rights.
“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,” said Senator Young.
“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,” said Senator Braun.
The Biden Administration’s 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, this totals to roughly $11.7 trillion in assets.
This new rule also allows retirement fund managers to prioritize ESG factors instead of financial returns in their investment decisions for workers’ hard-earned savings. Plan participants may unknowingly be enrolled in these ESG funds as well.
A number of studies have shown that ESG investing policies have worse rates of return. 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 an 8.9% return respectively. Additionally, in comparison to other investment plans, ESG investors generally end up paying higher costs for worse performance.
Senators Young and Braun were joined by Senators Mitch McConnell (R-Ky.), John Thune (R-S.D.), Joe Manchin (D-W.Va.), John Barrasso (R-Wyo.), Marsha Blackburn (R-Tenn.), John Boozman (R-Ark), Ted Budd (R-N.C.), Katie Britt (R-Ala.), Bill Cassidy (R-La.), Shelly Moore Capito (R-W.Va.), Susan Collins (R-Maine), John Cornyn (R-Texas), Tom Cotton (R-Ark.), Kevin Cramer (R-N.D.), Mike Crapo (R-Idaho), Ted Cruz (R-Texas), Steve Daines (R-Mont.), Joni Ernst (R-Iowa), Deb Fischer (R-Neb.), Lindsay Graham (R-S.C.), Chuck Grassley (R-Iowa), Bill Hagerty (R-Tenn.), Josh Hawley (R-Mo.), John Hoeven (R-N.D.), Cindy Hyde-Smith (R-Miss.), Ron Johnson (R-Wis.), John Kennedy (R-La.), James Lankford (R-Okla.), Mike Lee (R-Utah), Cynthia Lummis (R-Wyo.), Roger Marshall (R-Kansas), Jerry Moran (R-Kansas), Markwayne Mullin (R-Okla.), Lisa Murkowski (R-Alaska), Rand Paul (R-Ky.), Pete Ricketts (R-Neb.), Jim Risch (R-Idaho), Mitt Romney (R-Utah), Marco Rubio (R-Fla.), Mike Rounds (R-S.D.), Eric Schmitt (R-Mo.), Rick Scott (R-Fla.), Tim Scott (R-S.C.), Dan Sullivan (R-Alaska), Thom Tillis (R-N.C.), Tommy Tuberville (R-Ala.), J.D. Vance (R-Ohio), and Roger Wicker (R-Miss.).
This disapproval resolution was endorsed by over 100 groups:
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, and Young Conservatives of Texas.