Providing for Congressional Disapproval of the Rule Submitted By the Department of Labor Relating to ``Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights''

Floor Speech

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Mr. BARR. Mr. Speaker, I thank the gentlewoman, the chairwoman of the committee, for her leadership in fighting the politicization of capital allocation and the politicization of retirement savings.

Mr. Speaker, today House Republicans stand on the side of retail investors. We stand up for millions of Americans around the country who are increasingly asking themselves this simple question: When will I be able to retire?

This Congressional Review Act measure that I am offering is a bipartisan, bicameral joint resolution, disapproving of a Department of Labor rulemaking that will politicize Americans' retirement accounts and jeopardize their retirement security.

This measure simply states that retirement plan sponsors be required to prioritize maximum financial returns for investors ahead of nonpecuniary factors like environmental, social, and governance standards, a political agenda.

We do so in a moment where one in five Americans have saved nothing for their retirement, including one in three baby boomers, the generation closest to retirement.

We do so in a moment when 78 percent of Americans are either extremely or somewhat concerned about affording a comfortable retirement.

We do so in a moment where the gap between the amount of money that Americans have saved for retirement and the amount that they will need for retirement is $3.8 trillion.

That is why, Mr. Speaker, Congress must act to block the Biden administration's recent rule that green-lights so-called ESG investing in millions of Americans' retirement plans, plowing them into less diversified, higher fees, and lower-performing portfolios at precisely the time that we need to maximize financial security for Americans approaching retirement.

So let's consider the facts. According to a recent Wall Street Journal report, ESG funds carry 43 percent higher fees than non-ESG funds.

That is what they want. They want Americans to be forced into higher fee funds. A recent study from NYU and the University of Southern California found that over the past 5 years, global ESG funds have underperformed the broader market by 250 basis points per year, an average of 2.6 percent lower return than non-ESG funds.

This stands to reason because ESG funds are, by design, less diversified. This is investing 101.

When you discriminate against energy stocks, and you are heavy in tech, when you are in a tech sell-off, and when energy underperforms the market, who loses? The American retail investor who is unwittingly invested in these fraudulent, cancerous funds.

This means that an investor who put $10,000 into an average global ESG fund in 2017 would have realized a $1,750 lower return than if they had invested in the broader market.

While some of my friends on the other side of the aisle argue that ESG investing is actually driven by investors themselves, not ideologues at asset management firms and the White House who want to push their environmental or social causes at the expense of retail investors, a 2021 study conducted by the University of Chicago and FINRA proves investors largely do not care.

Mr. Speaker, 21 percent of investors don't even know what ESG stands for. Is that popular? Is that what popular ESG is?

And this neutrality nonsense. Look, nobody is saying you can't invest based on your values, but this bill would steer people unwittingly into these funds.

The status quo does not deny people to invest based on their values. It just says that the default has to be to maximize returns.

So, Mr. Speaker, this debate today is not about investor protection. It is about the ability of investors to maximize returns.

It is also about energy security. Even if you don't have a retirement account, this radical ESG movement is hitting your wallet.

Since President Biden took office, his administration has waged a war on American energy production; not just holding up leases or blocking infrastructure, but through financial regulation and the weaponization of financial regulation to divert resources and capital and financing away from the American energy sector.

There has been a 25 percent decline in investment in natural gas and in oil investments since 2021, and the result? Gas prices are up 40 percent, and diesel prices are almost double.

Household energy costs hit a 10-year high this winter, costing average American families $1,200, according to a report from the National Energy Assistance Directors Association.

These price hikes and the decline in investment in our energy supply come at the exact time that the Biden administration itself estimates that by 2050, almost half of our Nation's energy supply will be made up of oil and natural gas.

Mr. Speaker, we need more, not less, capital investment and financing of American energy.

I implore the administration. It is time for you to end your assault on energy production that is fueling 40-year high inflation.

We, as Members of Congress, cannot allow this administration to continue to perpetrate their war on American energy at the expense of investors.

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Mr. BARR. Mr. Speaker, I don't know if my colleagues on the other side of the aisle don't understand the existing law and what this resolution does and what the Department of Labor's new rule is, or whether they are just trying to confuse the listeners and watchers here today because the truth is that this is not material for the vast majority of Americans.

The studies show that most Americans don't even know what ESG is. To the extent Americans do find it material, nothing in this resolution prohibits an American from allocating their capital the way they want to.

What this resolution will do is stop the Department of Labor from coercing Americans into lower performing, higher fee, less diversified, politicized funds. We must stop the politicization of allocation of capital.

When my friend from Illinois says: Well, why are Republicans picking losers? Really?

In 2022, the S&P 500 energy sector ended the year a whopping 59 percent higher than where it started. Amid a brutal bear market in which the S&P 500 overall lost 20 percent, if you were invested in ESG in 2022, you were a massive loser because you were divested from energy.

Stop the politicization of capital. If you want to give Americans freedom to choose what is material for them in investing, vote against the Department of Labor rule, which would conceal what the Department of Labor is doing, which is steering Americans into investments that have political values that they disagree with.

Give Americans true transparency. Go back to the Department of Labor rule under the Trump administration, which says the default should always be consistent with ERISA, maximizing financial performance.

If you want an alternative, if you want to subordinate financial returns to the environment, to climate change, to social justice, to whatever, and you really don't care about your retirement security, then you can choose that.

Let the American investor decide, and the default should always be maximum investor returns.

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