Majority of Senate Votes to Prohibit Federal Retirement Savings from Funding China

WASHINGTON — Last week, a majority of the U.S. Senate voted in favor of an amendment that would prohibit the retirement savings of all federal employees, including members of the Armed Forces, from being invested in countries designated as threats — or official “countries of concern” — to the U.S., including China and Russia. The amendment (#523) was offered by Senators Marco Rubio (R-FL), Joni Ernst (R-IA), and Jeanne Shaheen (R-NH) to the Senate’s National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2024. Despite not reaching the 60 vote threshold for passage, 55 senators — a majority — voted in favor of the amendment, while 42 senators opposed it.

According to data published by CPA, and that was reported on by The Wall Street Journal and Newsweek, the TSP has serious exposure to companies owned or controlled by the Chinese Communist Party (CCP). As such, “[m]illions of federal employees can invest in Chinese companies sanctioned by the U.S. government via its flagship retirement plan, even though these companies have been branded a danger to national security or are accused of profiting from forced labor or other human rights abuses.”

The Senate’s vote represents the first time that Congress has ever considered legislation to protect federal employees and retirees from unwittingly funding Chinese companies, and it comes at a time when China is increasing its malign activity. Just last month, authorities in California discovered an illegal Chinese bioweapons lab filled with infectious diseases like E. coli, Chlamydia, Hepatitis, and Herpes. Additionally, investigators found nearly 1,000 lab mice that had been bioengineered “to catch and carry the COVID-19 virus.” The U.S. Air Force is also investigating a mysterious company that has purchased nearly $1 billion worth of land around Travis Air Force base in California — a tactic that China has used before.

Amid efforts to crack down on outbound U.S. investment in China, last month Beijing asked law firms to “tone down the language used to describe China-related business risks in Chinese companies’ offshore listing documents, warning failure to do so could cost them regulatory green light for the IPOs.” In CPA’s view, this is nothing short of whitewashing serious material risks associated with Chinese companies in order to protect massive profits for Wall Street.

“Last week’s vote was a monumental step forward in ensuring that federal retirement savings is prohibited from flowing to CCP companies that are directly aiding and abetting Beijing’s military modernization, surveillance state, and other malign activities,” said Michael Stumo, CEO of CPA. “The majority of the Senate supports this legislation, and we will be working with lawmakers in the House to ensure this bill becomes law. Congress has a duty to protect U.S. national security and the interests of millions of federal employees that are unwittingly funding America’s greatest geopolitical and military adversary.”

Amendment #523 to the Senate NDAA is the legislative text of the Taxpayers and Savers Protection (TSP) Act, bipartisan, bicameral legislation. That bill would ban the Federal Retirement Thrift Investment Board (FRTIB) from enabling federal employee retirement funds in the Thrift Savings Plan (TSP) to fund companies in those designated hostile nations. The TSP is  the largest retirement fund in the world with more than $720 billion in assets. Last week, CPA joined military leaders, human rights organizations, and national security experts in urging the Senate to support amendment #523. Read CPA’s Myths vs Facts on the TSP Act here.

Senators Marco Rubio (R-FL), Jeanne Shaheen (D-NH), Rick Scott (R-FL), Joni Ernst (R-IA), and Josh Hawley (R-MO) introduced the TSP Act in the Senate. U.S. Representatives Michael Waltz (R-FL), Chrissy Houlahan (D-PA), John Rutherford (R-FL), Elise Stefanik (R-NY), Mike Gallagher (R-WI), and August Pfluger (R-TX) introduced the bill in the House.

Shockingly, the FRTIB, which is in charge of managing the TSP, admitted publicly that it has not conducted any due diligence to evaluate whether the TSP and the products it offers in its Mutual Fund Window include Chinese-owned entities that pose national security risks or fund Chinese companies engaged in human rights violations.

The full amendment vote is below: