Momentum renewed for banning Congress from trading stocks

written by TheFeedWired

A push to ban lawmakers from trading stocks is picking up momentum after President Donald Trump said he would sign a bill that made it to his desk in an issue that has been debated for years and is broadly supported by voters on both sides of the aisle but has struggled to make it through Congress. A series of bills putting restrictions on lawmakers’ trading have been introduced over the years amid accusations of members of Congress using their posts and advanced or privileged information to enrich themselves. Some high-profile lawmakers, like former House Speaker Nancy Pelosi, D-Calif., and Rep. Marjorie Taylor Greene, R-Ga., have drawn scrutiny and criticism for well-timed trades recently but are far from the only members of Congress who have dealt with accusations of impropriety.

There is such an impression that members are so adept at picking stocks that products have been created allowing Americans to copy the trades of specific lawmakers or parties to gain an edge on the market. While a growing chorus of lawmakers have called for restrictions or outright bans on trading individual stocks, none of the proposals have made it for a full vote in either chamber in recent years. The Senate Homeland Security and Government Affairs Committee advanced a bill last year, but it did not pass the full Senate.

There is renewed momentum on both sides of the aisle to tackle the issue this year with a new bill introduced this week by Sen. Josh Hawley, R-Mo. The bill the Preventing Elected Leaders from Owning Securities and Investments Act, named after the former speaker, would ban members of Congress from trading or holding individual stocks. “Members of Congress should be fighting for the people they were elected to serve—not day trading at the expense of their constituents,” stated Senator Hawley.

“Americans have seen politician after politician turn a profit using information not available to the general public. It’s time we ban all members of Congress from trading and holding stocks and restore Americans’ trust in our nation’s legislative body.” If the bill were to become law, current members would have 180 days to comply with the ban. Newly elected lawmakers would be required to comply within 180 days of taking office.

Penalties for not complying would be forfeiting profits to the Treasury Department and fines from the congressional ethics committees. Democrats have also been supportive of a stock trading ban with House Minority Leader Hakeem Jeffries recently telling MSNBC in an interview, “we do need to change the law so that sitting members of Congress cannot trade stock, period. Full stop.” Trump said last week that he would sign a bill banning stock trading if one reached his desk.

“Well, I watched Nancy Pelosi get rich through insider information, and I would be OK with it. If they send that to me, I would do it,” Trump told Time magazine in an interview, responding “absolutely” to if he would sign such a bill. It’s not clear whether House Speaker Mike Johnson or Senate Majority Leader John Thune would support putting a bill on the floor, but Trump’s support could prompt some urgency for Republicans to act.

Democratic leadership has also supported banning trading after recent public disclosures from Greene showed she purchased stocks when the and then quickly rose after a partial reversal. “When you look at the polling on where Americans stand on banning insider trading, it's incredibly high. It'd be really hard to be on the other side of that,” said Rob Alexander, a political science professor at Bowling Green.

“It seems like it's an easy win for all members of Congress to support something like this and see it through. In a time where it is so fractured, to find a sliver of bipartisanship seems like it's possible.” and are required to report trades or face fines, though critics argue that the policy lacks teeth and does not go far enough to ensure members of Congress are abiding by the law. Failing to disclose trades within the 30 to 45 days required by the 2012 STOCK Act is only punished by a $200 fine.

There is broad support among voters from both parties to ban stock trading by members of Congress. A recent from the University of Maryland found 72% of voters favored prohibiting members of Congress and their live-in family from trading stocks. Seventy-one percent of Republicans agreed with a ban along with 78% of Democrats.

The public’s faith in Congress has steadily declined over the last 50 years as broader faith in government to act responsibly and in voters’ best interests has also faded as time has passed. “It's that perception that they're all crooked. ‘Let's try and rein them in the best that we can,’” Alexander said.

“Public opinion polling has been done for decades on how much people trust Washington to do what is right, and that trust in Washington has declined over time, and there's very few that believe that members of Congress do the right thing all the time.”

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