The Biden administration agreed on Thursday that a massive government retirement fund should not invest in Chinese-owned companies after mounting criticism from Republican lawmakers who warned that such a move could potentially channel the savings of federal workers to businesses that pose a national security threat.
In a letter first obtained by FOX Business, the Federal Retirement Thrift Investment Board – which manages the retirement savings plan – conceded the fund should not invest in companies from China or other countries that could compromise the country’s national security.
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“We agree it is unfitting for Americans to invest in companies from China or elsewhere that undermine US national security,” the letter said.
It was addressed to Republican Sens. Marco Rubio of Florida, Tom Cotton of Arkansas and Tommy Tuberville of Alabama, who have spearheaded congressional efforts to codify a Trump administration policy that temporarily blocked the fund from investing in Chinese-owned companies. Until now, the Biden-nominated board members of the Thrift Investment Plan have refused to say whether the retirement fund should invest in Chinese firms.
In the letter, the four board nominees tapped by Biden – Dana Bilyeu, Leona Bridges, Michael Gerber and Stacie Olivares – noted that Congress provided authority to the Department of Treasury’s Office of Foreign Assets Control to ban any American from making investments that could hinder national security.
“We fully support OFAC’s ability to exercise its authority and we commit that any company banned by OFAC, whether based in China or elsewhere, would not be included in any TSP fund,” they wrote.
The fund, which is similar to a 401(k), is used by roughly 6 million federal workers, including members of the military. It has served as the latest flashpoint on Capitol Hill, with Democrats pushing the board to divest the fund’s assets from fossil fuel companies, while Republicans have pushed to yank funds from any Chinese-linked company.
Republicans applauded the move, with Tuberville calling it a “big win for our military and federal civilian employees.”
“Investing in Chinese companies is a financial risk to Americans that also undermines our national security,” Tuberville said. “I am glad to hear that President Biden’s nominees to the FRTIB agree.”
US-China relations deteriorated under former President Donald Trump and have soured further under President Biden, who has kept in place his predecessor’s sweeping tariffs on Beijing.
The concession comes after pushback from the GOP lawmakers – Tuberville, Rubio and Cotton – who held up the Thrift Savings Plan board nominees until they promised to not allow federal employees’ retirement funds to be invested in Chinese corporations. The Republicans demanded a “commitment” from the nominees that they not revisit a controversial proposal that would shift the saving plan to a benchmark that includes Chinese companies.
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“The FRTIB’s previous actions have demonstrated a willingness to invest American retirement savings into Chinese companies working to undermine US interests and national security, as well as exposing federal employees’ retirement savings to considerable risk,” they wrote at the time. “This cannot be allowed in the future.”