Romney Joins Colleagues in Challenging President Biden’s Rule that Politicizes Americans’ 401(k)s

WASHINGTON—U.S. Senator Mitt Romney (R-UT) today joined all 48 of his Republican colleagues, led by Senator Mike Braun (R-IN), and Senator Joe Manchin (D-WV) in introducing a resolution of disapproval challenging 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 resolution of disapproval, which was introduced in the House by Representative Andy Barr (R-KY), is set to receive a vote on the Senate and House floors and requires a simple majority vote threshold to pass and be sent to the President

“Hundreds of millions of Americans’ retirement funds have taken a hit in our current economy,” Senator Romney said. “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.”


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.

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.