Lawmakers in both parties are quickly jumping on the push to ban members of Congress from trading stocks, but now they face the challenge of sorting through a growing number of competing proposals and settling on what exactly that delicate policy would look like.
What began as a lonely and unpopular campaign by a handful of lawmakers almost a decade ago has, in just a few months, mushroomed into a powerful drive that’s forced party leaders — most notably Speaker Nancy PelosiNancy PelosiStock ban faces steep hurdles despite growing support This week’s must-watch moments on Capitol Hill Pelosi extends House proxy voting until March 30 MORE (D-Calif.) — to abandon their initial opposition and jump on board.
“It’s not easy to have an institution block itself from practices that it can currently be engaged in,” Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezStock ban faces steep hurdles despite growing support Sen. Capito tests positive for COVID-19 Marjorie Taylor Greene roasted for ‘gazpacho police’ remark MORE (D-N.Y.) said Thursday on a press call. “The people at home watching have made it too difficult to ignore.”
The idea has caught fire following revelations that dozens of lawmakers may have violated existing laws designed to eliminate conflicts of interest between legislators and the investments they make.
In one notable case, Sen. Richard BurrRichard Mauze BurrOn The Money: Border blockade hits US economy Stock ban faces steep hurdles despite growing support Stock trading ban gains steam but splits Senate GOP MORE (R-N.C.), former chairman of the Senate Intelligence Committee, was investigated by the FBI for stock trades he’d made at the start of the COVID-19 pandemic, including the sale of shares in travel companies that suffered heavy losses just weeks later. (The FBI dropped the case early last year without pursuing charges.)
Other critics of the status quo are pointing to the case of former Rep. Tom PriceThomas (Tom) Edmunds PriceOn The Money: Border blockade hits US economy Stock ban faces steep hurdles despite growing support HP printer vs. Canon printer vs. Epson printer MORE (R-Ga.), who traded heavily in health care stocks while sitting on a committee that dictated health policies relevant to those companies. Price went on to head the Health and Human Services Department under former President TrumpDonald TrumpWisconsin Supreme Court allows ballot boxes to be banned for April election On The Money: Border blockade hits US economy Overnight Health Care — COVID-19 vaccine for young kids delayed MORE.
Supporters of the tougher restrictions maintain that, even if no laws are broken, the current system can create damaging public perceptions that lawmakers are trading on nonpublic information gleaned from their unique work on Capitol Hill or that they’re crafting legislation with designs to boost their own financial well-being.
“People need to be able to have confidence that policymakers are making decisions on what’s best for the country, not what’s best for their own bottom line,” said Sen. Sherrod BrownSherrod Campbell BrownStock ban faces steep hurdles despite growing support Questions loom over how to form congressional staff union Biden Fed picks get boost from dozens of economists MORE (D-Ohio). “It really is as simple as that.”
But the idea is proving to be so popular that lawmakers now face the conundrum of deciding whose exact proposals should make the cut.
Brown and Ocasio-Cortez are part of a bicameral group of lawmakers pushing legislation that explicitly bars members of Congress and congressional staff from trading individual stocks. But the proposal, which is sponsored by Rep. Raja KrishnamoorthiSubramanian (Raja) Raja KrishnamoorthiStock ban faces steep hurdles despite growing support NFL tells House panel Washington Commanders blocking documents in misconduct probe Frustrated Democrats amp up pressure on Biden over global vaccinations MORE (D-Ill.) and Sen. Jeff MerkleyJeff MerkleyStock ban faces steep hurdles despite growing support Franken on Senate resignation: ‘They made it impossible for me to get due process’ Climate will define Biden’s legacy MORE (D-Ore.), is part of a crowded field of competing legislation, raising fears that the effort will die within a circular firing squad of those who agree on the concept, but not the specifics.
It’s a hazard that’s already on the radar of some advocates.
“What we’re trying to do as a group is make sure we don’t lose sight of the central premise of the immediate effort. That is, we have a deeply poisonous problem of members trading in individual stocks while they’re writing policy. And that’s just unacceptable,” Merkley said.
“Now we’re going to have to work to bring everybody into a common effort and make sure that this happens,” he added, “and we don’t get distracted or lost in the field of every possibility.”
The effort got a huge boost when Pelosi, after saying as recently as December that she opposes a ban on stock trades, changed course and endorsed the idea.
But the Speaker also complicated the debate this week by suggesting that any new financial restrictions should transcend Congress to capture the judiciary branch, including the Supreme Court.
“It has to be government‑wide,” Pelosi said. “The Supreme Court has no disclosure, it has no reporting of stock transactions. And yet it makes important decisions every day.”
Pelosi said she has tasked committee leaders with reviewing legislation, an effort being led by Rep. Zoe LofgrenZoe Ellen LofgrenStock ban faces steep hurdles despite growing support Pelosi backs ban on stock trading in Congress US-China competitiveness bill sparks battle over e-commerce MORE (D-Calif.), a Pelosi ally who heads the House Administration Committee.
There are a variety of considerations lawmakers must grapple with in the competing proposals, such as whether to extend the ban to lawmakers’ spouses, family members and their staff; require lawmakers to put their assets in a blind trust; allow them to invest in mutual funds; apply the ban across the other branches of the federal government; and how forcefully to penalize any violations.
Supporters of the Krishnamoorthi bill maintain that it should be the central vehicle for the coming debate since it’s been around for years, allowing it to be vetted, and its explicit ban on stock trading for both lawmakers and senior staff makes it “the meatiest of them all,” in the words of Ocasio-Cortez.
Yet his proposal does not include a ban on stock trades orchestrated by lawmakers’ spouses, sparking concerns that it would create a huge loophole, nor does it extend beyond the legislative branch.
One bill from Reps. Abigail SpanbergerAbigail Davis SpanbergerStock ban faces steep hurdles despite growing support On The Money — Inflation hits highest rate since February 1982 Democrats see inflation as growing problem for their agenda MORE (D-Va.) and Chip RoyCharles (Chip) Eugene RoyStock ban faces steep hurdles despite growing support Stock trading ban gains steam but splits Senate GOP House passes stopgap bill to prevent shutdown MORE (R-Texas), which they first introduced in 2020, would require all members of Congress, as well as their spouses and dependent children, to place their assets into a blind trust. But investments like mutual funds or Treasury bonds would not be subject to the requirement.
Democratic Sens. Jon OssoffJon OssoffStock ban faces steep hurdles despite growing support Senate panel advances controversial bill aimed at protecting children online Biden to meet with Senate Judiciary Democrats on Supreme Court vacancy MORE (Ga.) and Mark KellyMark KellyStock ban faces steep hurdles despite growing support Democrats see inflation as growing problem for their agenda Arizona Senate candidate releases Super Bowl ad showing armed ‘showdown’ with Dem leaders MORE (Ariz.) introduced a similar measure last month requiring assets to be placed into a blind trust. And under their proposal, lawmakers would be penalized for any violations by being fined the amount of their entire congressional salary.
Sen. Ben SasseBen SasseStock ban faces steep hurdles despite growing support Stock trading ban gains steam but splits Senate GOP On The Money — Shipping profits draw scorn amid supply woes MORE (R-Neb.) has suggested going even further with his own bill that would subject members of Congress found to be trading individual stocks to a fine of up to $1 million, five years in prison, or both.
Yet another bill from Sen. Josh HawleyJoshua (Josh) David HawleyStock ban faces steep hurdles despite growing support The Senate confirmation scandal is a liability to US foreign relations On The Money — Inflation hits highest rate since February 1982 MORE (R-Mo.) would prohibit members of Congress and their spouses from holding or trading individual stocks but wouldn’t subject dependent children to a requirement to divest holdings or place them in a blind trust.
Rep. Katie Porter (D-Calif.) and Sen. Kirsten GillibrandKirsten GillibrandStock ban faces steep hurdles despite growing support Senate passes bill ending forced arbitration in sexual misconduct cases Al Franken: ‘It would be tempting’ to run for office again MORE (D-N.Y.), meanwhile, introduced a bill this week that would build on the original 2012 law — known as the STOCK Act — which prohibits insider trading by members of Congress. Their legislation would increase penalties for violating the STOCK Act’s financial transaction disclosure requirements, and extend those requirements to the Federal Reserve and the judiciary.
George is Digismak’s reported cum editor with 13 years of experience in Journalism