Congress' half-trillion dollar weapon
Members of Congress from both parties are trying to turn the massive federal employee pension fund into a tool for their political ends, using its huge financial sway to support or oppose certain industries.
Why it matters: The half-trillion dollar Thrift Savings Plan is the largest defined-contribution retirement plan in the world. But those charged with overseeing it say politicizing any of its investment decisions risks its overall financial health.
- Democrats want to use it to go after fossil fuel companies. Republicans want to bar Chinese-owned firms getting any money.
- The Democratic chairman of the Senate committee overseeing the fund — and which will consider President Biden's new nominees to the board running it — feels any effort to use the TSP to advance policy goals is misguided, an aide tells Axios.
What's happening: Biden last week nominated four new members of the Federal Retirement Thrift Investment Board, which oversees the Thrift Savings Plan.
- Progressives are pushing for Biden's nominees to divest the fund's assets from fossil fuel companies. The Revolving Door Project, a progressive good-government group, called on one of the nominees to "rise to the occasion" and lead that effort.
- Sens. Jeff Merkley (D-Ore.) and Maggie Hassan (D-N.H.) requested a study this year on the feasibility of that fossil fuel divestment. Hassan is a member of the Senate Homeland Security and Government Affairs Committee, which will consider Biden's new nominees.
- Merkley subsequently introduced legislation pushing divestment. He told The Daily Poster last week he has pressed the Biden administration “to ensure that divestment is a priority for appointees to the Federal Retirement Thrift Investment Board."
What they're saying: HSGAC Chairman Sen. Gary Peters (D-Mich.) is cool on investment decisions that aren't financially rooted.
- "Sen. Peters does not think that federal employees’ retirement funds should be used as a political football," a committee aide told Axios.
- "Forcing FRTIB to make investment decisions based on political whims could end up harming the federal government’s competitiveness as an employer at a time when we need to be attracting the most talented individuals in fields like cybersecurity and artificial intelligence."
It's not just Democrats trying to leverage the massive fund.
- Sen. Tommy Tuberville (R-Ala.) introduced legislation in May that would codify a Trump administration policy temporarily blocking the fund from investing in Chinese-owned companies.
- A previous version of the legislation was introduced last Congress by Sens. Marco Rubio (R-Fla.) and Jeanne Shaheen (D-N.H.). A cosponsor, Sen. Josh Hawley (R-Mo.), also sits on the HSGAC.
- Republicans have eyed similar measures at the state level, where a group of GOP state treasurers recently threatened to yank state funds from banks that pull back lending and investment from fossil fuel firms.