Rep. Andy Barr (R-KY) and Sen. Mike Braun (R-IN) have introduced a Congressional Review Act (CRA) measure in the House and Senate, respectively, to nullify the Department of Labor’s recently finalized rule to greenlight environmental, social and governance (ESG) investing in federal pension plans.
Congress, through the Congressional Review Act (CRA), may review and choose to reject new regulations issued by federal agencies. Under the CRA, before most final rules can take effect, an agency must submit them and supporting information to the House, Senate and the comptroller general. Rules defined as “major” under the CRA may not take effect for at least 60 days (30 days for non-major rules), with exceptions in some cases. Congress generally has a 60-day window to act on a joint resolution of disapproval to take advantage of the CRA’s special “fast track” procedures. If both the House and Senate pass the resolution and it is signed by the President, the CRA states that the disapproved rule “shall not take effect (or continue).” It is a mechanism last used in the early days of the Trump Administration to overturn Obama-era safe harbor regulations regarding state-run IRA programs and ERISA.
Now, even though the House will be under Republican control come January, the Senate remains in Democratic party control—and in the extraordinarily unlikely event that some kind of alignment would happen on this issue, the odds that President Biden would sign it seem remote, to put it mildly.
Curiously, in a press release regarding the move, the ESG regulation was cited as “threatening the returns and financial security of unwitting federal employees whose retirement funds will likely be invested in higher fee, less diversified, and lower performing ESG-tethered instruments in the name of woke politics.” Federal employees’ retirement plans wouldn’t be subject to the regulation, as it applies to ERISA plans.
Reps. Rick Allen (R-GA), Bill Huizenga (R-MI), Greg Murphy (R-NC), Bryan Steil (R-WI), French Hill (R-AR), and Brad Finstad (R-MN) are cosponsors of Rep. Barr’s CRA.
