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A bipartisan group of senators unveiled a proposal Wednesday that would ban members of Congress, their spouses, and their dependent children from trading individual stocks.
The Senate Homeland Security and Governmental Affairs committee is expected to take up the bill, which would also require members to divest from any individual assets, later this month.
It’s the latest move in a years-long push to ban lawmakers from stock trading, a move that Americans largely support, but which has repeatedly stumbled on Capitol Hill. Members of Congress are subject to insider trading laws and must also disclose any trades valued at more than $1,000 within 45 days, but experts say the rules are insufficient and unevenly enforced.
SIGNALS
Ban has been difficult to get by lawmakers
It’s generally difficult to make progress on any issue that will impact lawmakers’ pocket books, Oregon Democrat Sen. Jeff Merkley told NPR, adding that “members of Congress get very twitchy and when you say your family will be covered too, they have concerns.” If passed, lawmakers who violate the ban would face fines equivalent to their monthly salary or 10% of the value of each improper investment. Previous bipartisan efforts to restrict or ban congressional stock trading have failed, with then-House Speaker Nancy Pelosi declining to bring it to a vote in 2022. “We’re a free-market economy,” Pelosi had said at the time. “They [members of Congress] should be able to participate in that.”
Members’ stock trades reveal possible conflicts of interest
Some members of Congress have failed to abide by the House’s current stock rules, which experts describe as relatively loose. Last year, Business Insider identified 78 members who had recently failed to report their financial trades as mandated by the Stop Trading on Congressional Knowledge Act of 2012. In 2022, The New York Times reported that nearly a fifth of members engaged in trades that could be conflicts of interest. And while some of those wouldn’t have run afoul of the STOCK Act or insider trading laws, they still present ethical dilemmas for lawmakers who have access to market-moving information that the public does not.
Some lawmakers support the ban publicly, but not privately
“Members fear this… They don’t want to vote in committee, they don’t want to vote on the floor. My view is that’s the only way to get this done,” Missouri Republican Josh Hawley, one of the senators involved in this latest push, said in January. “Because I’ve seen this movie now for several years and it’s always people saying, ‘Oh yeah, I’m very open to this.’ And then they kill it behind the scenes.” Democrats have made similar allegations, with some in 2022 accusing party leadership of knowingly putting forward a complicated stock-trading ban that was predestined to fail.