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 Pelosi (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-Cortez (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 Burr (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 Price (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 Trump.
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 Brown (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 Krishnamoorthi (D-Ill.) and Sen. Jeff Merkley (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 Lofgren (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 Spanberger (D-Va.) and Chip Roy (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 Ossoff (Ga.) and Mark Kelly (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 Sasse (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 Hawley (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 Gillibrand (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.