National

President Biden on Monday vetoed a bill that would have repealed a Department of Labor rule allowing retirement fund managers to consider environment, social and governance (ESG) principles in their investment decisions.

Why it matters: It was Biden's first use of the veto since becoming president, though several more may be on the way with Congress on track to pass other pieces of legislation the White House opposes.

The House has scheduled a veto override vote on the legislation on Thursday.

Between the lines: Two vulnerable Senate Democrats up for re-election in 2024 — Sens. Joe Manchin (D-W.Va.) and Jon Tester (D-Mont.) — broke with the White House earlier this month and joined Republicans in passing a House bill that would strike down the Labor Department's rule.

In order for the bill to become law, both chambers of Congress must pass it again with at least two-thirds of each body voting in favor.

What they're saying: Biden said on Monday he vetoed the legislation because "it would put at risk retirement savings of individuals across the country."

"They couldn't take into consideration investments that would be impacted by climate, impacted by overpaying executives. And that's' why I decided to veto it. It makes sense to veto it," he added.

"The President vetoed the bill because it jeopardizes the hard-earned life savings of cops, firefighters, teachers, and other workers – all in service of an extreme, MAGA Republican ideology," White House spokesperson Robyn Patterson said in a statement on Monday.

House Speaker Kevin McCarthy claimed on Monday that Biden, by vetoing the bill, "sided with woke Wall Street over workers."

"Now—despite a bipartisan vote to block his ESG agenda—it’s clear Biden wants Wall Street to use your retirement savings to fund his far-left political causes," McCarthy said.

The big picture: The Labor Department rule doesn't require fiduciaries for private companies to do anything, but it does permit them to include ESG considerations in investment decisions.

Supporters of the ESG framework say it allows investors to support companies that are attempting to manage risks related to environmental, social, and governance criteria, such as the financial and economic risk posed by climate change.

Anti-ESG sentiment runs hot throughout the Republican Party in general, Axios' Hans Nichols reports. Conservative groups have derided it as "woke capitalism" and have set out to dismantle it.

Go deeper: Investors get caught in political crossfire in ESG fight

Editor's note: This story has been updated with additional reporting.

financial and economic risk posed by climate change

Investors get caught in political crossfire in ESG fight

Biden issues first veto of his presidency

Conservative groups have derided ESG as "woke capitalism" and have set out to dismantle it.

President Biden speaking in Baltimore on March 1. Photo: Drew Angerer/Getty Images

Joe Biden

Politics & Policy

The White House will take a preemptive shot at Republicans on the federal budget this week, rolling out a blistering five-point critique of a plan by the far-right House Freedom Caucus, Axios has learned.

Why it matters: The Biden administration — still waiting for Republicans' official budget plan for fiscal 2024 — is trying to gain a tactical advantage in the upcoming budget talks by casting a proposal by three dozen GOP hardliners as a "five-alarm fire" for Americans. 

The Freedom Caucus' plan calls for across-the-board cuts in U.S. agencies' funding by capping spending at 2022 levels for the next 10 years. It would end Biden's $400 billion student loan forgiveness program, reclaim unspent Covid funds, increase work requirements for welfare recipients, and more.

House Republicans insist that Biden cut his $6.8 trillion budget or they won't approve raising the debt ceiling — a move that could create an economic calamity. 

Driving the news: Each day this week, the White House plans to show how part of the Freedom Caucus plan would hurt Americans —using new analyses by agencies and the OMB:

Today:  Biden administration officials will say that cuts to police funding and train safety would endanger public safety.

Tuesday: They aim to show how health care and energy cuts required by the Freedom Caucus plan would raise costs for families.

Wednesday: The White House will emphasize how cuts in incentives for manufacturing investments would undermine U.S. workers by sending  manufacturing jobs overseas.

Thursday: They'll say that cuts to Medicare would be required, hurting seniors.

Friday: And that defense cuts would be necessary, weakening national security.

The big picture: The proposal from Freedom Caucus came just after Biden announced a plan that he said would trim deficits by nearly $3 trillion over 10 years, through various savings efforts and raising taxes on those earning more than $400,000 a year.

The Freedom Caucus is led by Rep. Scott Perry (R-Pa.), who has indicated that if Biden won't accept huge cuts, Republicans won't vote to raise the debt ceiling — and will blame the president if the U.S. defaults on its debt.

"America will not default on our debts unless President Biden chooses to do so," Perry said.

Between the lines: Senior White House officials have said serious budget negotiations between Biden and House Speaker Kevin McCarthy (R-Calif.) won't begin until House Republicans can agree on a GOP plan for federal spending. 

McCarthy indicated that the GOP budget may come later than the original April timeline.

The pair had an initial meeting in January to discuss the budget, but haven’t had a follow-up. 

What they're saying: Cuts such as what the Freedom Caucus proposes "would cause irreparable harm to our communities by gutting the programs every single American relies on," said Rep. Rosa DeLauro (D-Conn.), ranking member of the House Appropriations Committee.

"Those proposals are unrealistic, unsustainable and unconscionable."

$400 billion student loan forgiveness program

White House sounds alarm on Freedom Caucus' budget plan

Proposals would damage programs all Americans depend on, administration says.

Illustration of a penny as a fire alarm bell

Federal budget

President Biden wants Congress to enact tougher penalties for executives who oversee failed banks.

Why it matters: Silicon Valley Bank and Signature Bank were both taken over by the FDIC in the last week — events that threatened to grow into a larger-scale banking crisis.

The banks' downfall had to do with how they managed the risk that sat on their balance sheets — risks that sat in plain sight.

What he's saying: "I'm firmly committed to accountability for those responsible for this mess," Biden said.

"No one is above the law — and strengthening accountability is an important deterrent to prevent mismanagement in the future."

"When banks fail due to mismanagement and excessive risk taking, it should be easier for regulators to claw back compensation from executives, to impose civil penalties, and to ban executives from working in the banking industry again."

Backstory: Silicon Valley Bank experienced a record bank run last week after a crisis of confidence among investors and depositors.

At issue: Losses in its portfolio of long-term bold holdings, which sank in value as interest rates rose rapidly.

The bank faced the prospect of selling these assets for less than what they paid for them, in order to fund withdrawals. It announced a $1.8 billion loss on one such sale last week.

Critics point out that interest-rate risk was a well-known market risk over the last few years, and say the bank should have hedged its portfolio appropriately.

Worth noting: SVB CEO Greg Becker sold $3.6 million worth of his own stock in the company in late February — an action that the Department of Justice may scrutinize.

The bottom line: Becker saw tens of millions of dollars in the value of his equity evaporate over the last year — plus, he lost his job. 

While that might be somewhat of a deterrent for other bank executives, the law itself limits the Federal government's ability to hold banking leaders accountable, as Biden noted in his remarks.

"Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing," Biden said.

Biden to Congress: Ban execs of failed banks from the industry

Silicon Valley Bank and Signature Bank were both taken over by the FDIC in the last week.

President Biden at an event in Monterey Park, Calif., on Tuesday.

President Biden at an event in Monterey Park, Calif., on Tuesday. Photo: Allen J. Schaben / Los Angeles Times via Getty Images

Silicon Valley Bank

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Sneak Peek

Axios Sneak Peek

With the Senate finally voting to confirm Eric Garcetti as ambassador to India, senators and Democratic donors are turning their attention to something of a Biden-era mystery: the open embassy in Italy.

Why it matters: More than two years into his term, President Biden has yet to name anyone to serve as his ambassador in Rome, traditionally one of the choicest positions in the State Department.

Although the embassy's  chargé d'affaires, a career civil servant, can conduct the day-to-day diplomacy, most G7 countries expect to have a big-name ambassador in place —  someone who can call the president directly and cut through the State Department bureaucracy.

With deep economic and cultural ties to the United States, Italy, a member of NATO, is front and center both in arming Ukraine and diversifying Europe’s energy supply.

In addition to the ambassador's residence — a 15th century villa with private gardens and a wine cellar — the embassy offers plenty of substance for any former Wall Street executive, or former member of Congress, interested in foreign affairs.

Between the lines: The U.S. is unique among G20 countries in that roughly 30% of its ambassadors come from outside the career foreign service, with presidents from both parties doling out ambassadorships to allies and donors, as kings and queens bestowed titles in medieval European courts.  

The vacancy in Rome is perplexing both to the donors and politicians who aspire to it — and Republican senators who would likely grill any potential nominee.

"It's a usually highly coveted position," said Sen. Marco Rubio (R-Fla.). "It doesn't make any sense."

“Maybe they haven’t found the donor rich enough yet to give it to."

The intrigue: For most of the last two years, some aspiring ambassadors were convinced that Biden was holding Rome open for former Speaker Nancy Pelosi, a proud Italian American, once she decided to leave the House.

But with Pelosi not making any visible moves to leave Congress, the theory that Biden was preserving Italy for Pelosi has lost some currency.

Biden had been considering Stephen Robert, a former Wall Street executive with ties to Pelosi, for Italy. But he is no longer in the mix, according to people familiar with the matter.

The big picture: Biden, who campaigned on restoring America’s diplomatic relations across the globe, has had more of his ambassadors confirmed than President Trump.

But with 113 confirmed ambassadors, Biden lags behind Presidents Bush and Obama, who had 130 and 116, respectively, according to data from the Center for Presidential Transition at the Partnership for Public Service.

That is partly a result of a closely divided Senate, which was more focused on passing big pieces of legislation and confirming federal judges in Biden's first two years.

What they're saying: “President Biden has nominated more ambassadors to countries at this point in his presidency than any of his three predecessors, but has experienced even more delays than his predecessors in getting those nominees confirmed by the Senate,” said Valerie Smith Boyd, director of the center.

“To increase the speed at which ambassador vacancies are filled, we should reduce the overall number of positions requiring Senate confirmation.”

The bottom line: Garcetti’s confirmation, which included three Democratic "No" votes and seven Republican "Yeses," is a reminder that controversial nominees can require a unique, and even surprising, voting coalition to win a majority.

But before there’s a floor vote or even a hearing, Biden has to send a name for Italy to the Senate.

Biden's Italian mystery

Some were convinced Biden was holding Rome open for former Speaker Nancy Pelosi.

Nancy Pelosi showing a picture of her grandfather

Former House Speaker Nancy Pelosi receives honorary citizenship from the small Italian village where her mother was born. Photo: Alessandro  Serranó/AGF/Universal Images Group via Getty Images

Italy

President Biden is signing a gun control executive order on Tuesday that the administration says will get the country “as close to universal background checks as possible without additional legislation.”

Why it matters: It builds on the bipartisan legislation Biden signed into law last June, but requires the attorney general to get involved through a wonky process of redefining which firearms dealers are required to run background checks.

The order relies on encouraging more accountability and safer practices by gun owners and dealers through public information campaigns and databases.

“We need universal background checks legislation to finish the job,” said a senior administration official. 

The details: Biden will sign the executive order while visiting Monterey Park, California, where a mass shooting in January killed 11 and injured nine others.

Between the lines: As the president gears up for re-election, this executive order will be another action he can sell to voters as a way he’s tried to deliver when Congress couldn’t pass federal legislation to require universal background checks.

We’ve also seen this on police reform, when President Biden issued an executive order to address public safety after Congress failed to pass the George Floyd Justice in Policing Act.

The backdrop: Last year's bipartisan gun safety legislation enhanced background checks for those under 21, but even President Biden said at the time of signing it that "this bill doesn't do everything that I want."

Gun violence was a key issue that drove young voters to the polls in the 2022 midterms, ultimately helping Democratic candidates up and down the ticket.

Voters are still indicating that they want Congress to address gun violence and mass shootings, according to a Brookings report.

The bottom line: Gun safety leaders have wanted to see this move from the president, recognizing executive action is their best shot at moving closer to reform before the 2024 election — and ahead of a potential shift in power in Washington. 

John Feinblatt, president of Everytown for Gun Safety, called Biden's move a "home run for public safety" in a statement and said "we’re proud to stand with him as he takes robust action to help close the gun seller loophole."

Biden takes executive action on background checks for guns

But it will require federal legislation to achieve what universal background checks.

President Biden last summer after passing the bipartisan gun safety legislation. Photo: Win McNamee/Getty Images

Gun violence

President Biden said Monday that "Americans can rest assured that our banking system is safe, your deposits are safe" after the collapse of Silicon Valley Bank.

The big picture: Biden promised to do "whatever is needed" to prevent any additional bank runs. SVB's collapse was the second-largest bank failure in U.S. history.

Biden added that he will ask Congress and regulators to strengthen the rules for banks to "make it less likely this kind of bank failure would happen again."

He also vowed a "full accounting" of how the collapse happened and said that the management of banks being taken over by the FDIC will be fired.

Biden also assured Americans that "no losses will be borne by the taxpayers." The money, instead, will come from the fees that banks pay into the Federal Deposit Insurance Corporation, Biden said.

The FDIC insurance fund, funded by a levy on bank deposits, stands at roughly $125 billion, Axios' Felix Salmon notes.

State of play: Federal banking regulators on Sunday took aggressive new actions aimed at preventing depositors in Silicon Valley Bank from losing money — and at trying to prevent its downfall from unleashing a nationwide run across the banking system, Axios' Neil Irwin and Courtenay Brown report.

New York-based Signature Bank was shut down by regulators on Sunday. U.S. regulators in a joint statement said that it was part of an action aimed at curbing broader fallout from the failure of Silicon Valley Bank.

Biden says "banking system is safe" after SVB collapse

Biden also promised to do "whatever is needed" to prevent any other bank runs.

President Biden speaks about the banking system from the White House on Monday.

President Biden speaks about the banking system from the White House on Monday. Photo: Anna Moneymaker/Getty Images

Biden administration

Generate

Axios Generate

The White House is looking to strike a political balance with new decisions on Arctic oil.

Driving the news: The Interior Department on Monday is slated to back ConocoPhillips' big Willow project on Alaska's North Slope, per a source familiar with the decision and multiple news reports.

Approval of three drilling pads — not five, as ConocoPhillips initially sought — caps a years-long political and bureaucratic battle.

It will follow Sunday's announcement of protections elsewhere in the area to block drilling in Alaska's Arctic seas and 13 million acres onshore in the same region as Willow.

The big picture: Willow is substantively and symbolically important.

The multi-decade project is estimated to produce over 180,000 barrels per day at its peak in a state where political leaders are keen to revive stagnant output.

Oil execs have called it a test of whether the White House will follow through on support for domestic production as the war in Ukraine puts a fresh focus on energy security.

Yes, but: Environmentalists see a different test: one of Biden's bona fides on climate and preserving sensitive Arctic ecosystems.

The Wilderness Society's Karlin Itchoak, in a statement, welcomed the new conservation but said it is "not nearly sufficient to blunt the impact" of Willow.

The intrigue: Whether Willow is a climate threat or a rounding error depends on how you interpret Interior's sprawling environmental analysis.

It finds the big new development would create about 280 million metric tons of CO2-equivalent over 30 years, mostly from use of the oil produced.

Its approval comes as emissions must fall quickly and fossil fuel reliance must decline to keep global climate goals from slipping away.

Yes, but: On an annual basis, the estimated emissions are less than 1 percent of the 2019 U.S. total, per the analysis.

Willow is estimated to produce roughly 600 million barrels of oil over 30 years. Current global demand is roughly 100 million barrels per day.

What they're saying: "Notwithstanding howls from environmentalists, the greenlighting of Willow would appear to suggest the administration has not yet abandoned its wartime fossil fuel pragmatism," the research firm ClearView Energy Partners said in a note.

Threat level: Interior's analysis details the sweeping changes global warming is having on the area where Willow would be built, which is one of the fastest-warming locations on Earth.

It even includes the possibility that permafrost thaw may pose project infrastructure challenges, while also accelerating the release of greenhouse gases.

What we're watching: Likely litigation over Willow, and possibly more over the land and ocean conservation steps.

Biden's Arctic oil drama

Illustration of aviator sunglasses with Alaskan mountains reflected in the lenses. 

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

President Biden is using the release of his $6.8 trillion budget for fiscal year 2024 to challenge House Republicans to produce their own tax and spending blueprint without cutting Medicare or Social Security. 

Why it matters: Biden's plan, which has little chance of being enacted by Congress, amounts to the clearest distillation of his political priorities as he prepares to mount a re-election campaign by running against congressional Republicans.

“I want to make it clear: I’m ready to meet with the Speaker [Kevin McCarthy]) anytime — tomorrow if he has his budget,” Biden said in Philadelphia.

"My budget is going to give working people a fighting chance," he said. "We have made a lot of progress in the first two years."

The message to the wealthiest Americans was clear: "You have to begin to pay your fair share," Shalanda Young, the director of the Office of Management and Budget, told reporters. "We are happy to have that debate."

By the numbers: Biden is proposing $885 billion in overall defense spending to help fund the war against Russia in Ukraine and bolster the Pentagon’s procurement budget.

For domestic programs, a traditional top priority for Democrats, he's asking for even more, proposing some $1 trillion for so-called nondefense discretionary spending.

To achieve his spending priorities, which include shoring up Medicare and protecting Social Security, Biden relies on deficit spending and envisions a shortfall of $1.8 trillion next year.

The big picture: Biden has sought to frame his budget as a serious effort to rein in deficits, claiming that he will reduce overall deficit spending by $3 trillion over the next decade.

He hopes to achieve that goal with a new billionaire tax, forcing them to pay at least 25% on all of their income, including appreciated assets, in taxes.

He also wants to quadruple the tax on corporate stock buybacks and raise the overall corporate rate from 21% to 28%.

For Americans with unearned income above $400,000, the Medicare tax rate would jump from 3.8% to 5%, which Biden says will extend the program's solvency by 25 years.

As in prior budget proposals, he wants to increase the top tax rate to 39.6% from 37%, reversing a Trump-era tax bill.

Altogether, he plans to raise an additional $4.5 trillion from corporations and the wealthiest Americans.

Between the lines: Mandatory spending — for Social Security, Medicare, Medicaid and other programs — still constitutes the bulk of the federal budget and Biden is proposing more than $4.2 trillion in spending next year.

Interest on the national debt will cost $789 billion next year for a total of $10 trillion over the next decade.

For the Department of Homeland Security, the Budget requests $60.4 billion for next year, including $865 million for United States Citizenship and Immigration Services.

For the Department of Veterans Affairs, Biden is requesting $137.9 billion in spending, a modest $3 billion increase over the 2023 enacted level.

The bottom line: Biden's budget is a mixture of overall spending plans as well as individual spending priorities to score political points.

He plans to hammer Republicans to cap the cost of insulin at $35 a month for all Americans, according to administration officials.

Editor's note: This story has been updated to include the amount of tax increases on wealthy Americans and corporations, as well as Biden's comments in Philadelphia. 

Biden proposes $6.8 trillion budget to make rich pay "fair share"

“My 2024 Budget is a blue-collar blueprint to rebuild America," Biden said.

Photo: Andrew Harrer/Bloomberg via Getty Images

The Trump and Biden families are inspiring potentially bipartisan House legislation, Axios has learned.

Why it matters: The House Oversight Committee's top leaders are seeking to channel intense partisan hostilities into reforms for classified documents and presidential family finances.

"There are seeds of real legislative promise," Rep. Jamie Raskin (D-Md.), the top Democrat on the House Oversight Committee, told Axios.

Driving the news: Oversight committee staff are working on legislation to require more financial disclosure from presidential family members and reform the National Archives process for recovering classified documents at the end of presidential administrations, according to sources familiar with the discussions.

"I think those are the two biggest areas ... where there's an opportunity for bipartisan legislation," House Oversight Chair James Comer (R-Ky.) told Axios.

Comer and Raskin have already had broad-based discussions about what might be feasible on both fronts, the members told Axios.

Between the lines: The source of some of the most partisan, made-for-TV hearings in Washington is an unlikely venue for bipartisanship.

Despite the two going toe-to-toe in televised hearings, Raskin, in an interview with Axios, characterized Comer as a "serious legislator" with whom he can work in good faith. 

"I know he also has to deal with a very potent and sometimes toxic MAGA wing within his caucus and ... his committee," Raskin said.

Yes, but: A partisan divide could emerge over extending the disclosure mandate to family members not serving in government, and the talks are only “at the rhetorical level,” Raskin said.

Rep. Ro Khanna (D-Calif.), a progressive senior Oversight member, told Axios he doesn't see any reason to force disclosures from family members who are otherwise private citizens.

"Why should we have, like, Chelsea Clinton [disclose] her finances, or Malia Obama? No," said Khanna.

What they're saying: Comer told Axios he's hopeful about addressing "influence peddling" by family members of presidents.

Democrats "complained about the previous administration and family members doing things crossing the line with our adversaries," he said. "I’m obviously complaining about it with this administration."

Raskin said he is "certainly" on board with requiring disclosures from family members in federal jobs — i.e. Jared Kushner and Ivanka Trump. 

Raskin acknowledged a "structural problem where people conceivably could influence a president by influencing members of the President's family."

The big picture: Ethical and legal questions around Trump's family, business and foreign investments have long been a source of investigation and criticism from Democrats. 

The Democrat-led Oversight committee under Trump investigated the decision to grant security clearances to Kushner and foreign government spending at the Trump Hotel in D.C.

Republicans and conservative media have made prime targets out of Hunter Biden and the president's brother, James Biden. They've raised concerns around the pair's financial and business transactions with foreign actors.

House plots bipartisan deal on Trump and Biden family finances

"There are seeds of real legislative promise."

Photo illustration of Donald Trump and Joe Biden surrounded by excerpts of  financial documents, classified documents, and scribbles. 

Photo illustration: Aïda Amer/Axios. Photo: Brendan Smialowski/AFP and Eric Baradat/AFP via Getty Images

Congress

Donald Trump

President Biden's newest plan to bolster Medicare by raising taxes on the rich offers a glimpse into his policy priorities ahead of next year's presidential race — despite facing a tough path forward in Congress. 

The big picture: Biden's full budget proposal is set to be released Thursday as the deadline to raise the debt ceiling looms.

The proposal comes as Medicare faces an uncertain future —  the program's trust fund is expected to go bankrupt as soon as 2028. Medicare spending makes up one of the largest line items in the U.S. budget. 

Top Republicans have insisted they are not going to propose cuts to Medicare or Social Security during debt ceiling talks, but Biden has argued that previous GOP proposals show they might.

What’s inside Biden’s Medicare proposal

The plan offers a preview of Biden's political messaging ahead of the 2024 presidential race.

Joe Biden

The big picture

Biden's unity push at the State of the Union

China crashes Biden's State of the Union speech

Biden's new chief of staff to set a course for '24

Biden and McCarthy: A clash of strategies

Scoop: Biden's inflation-immigration pitch

Biden signs marriage equality bill into law

All Joe Biden stories