Top Democrats in Congress are signaling that Congress may vote soon to ban individual stock traders from the legislature. This is despite pressure from rank-and-file members of both parties, who argue that the idea is supported by overwhelming support.
Nancy Pelosi (D-Calif.), House Speaker, does not trade individual stocks, but her husband does. In December, she said that she did not believe a ban was necessary. However, her caucus members have changed their minds and pushed for the issue.
Pelosi stated that it was a confidence issue, and that if members wish to do that then that's exactly what we will do. She said Wednesday that House committees were currently working on a proposal, and that a bill could be moving "pretty soon".
Senator Majority Leader Chuck Schumer (D-N.Y.) also expressed support for a ban. Schumer stated Wednesday that he believes that Congress should address this issue and that it has raised interest from both sides over the past few weeks.
Two House members representing different parties push for bill
In 2018, Chip Roy, a Texas Republican, and Abigail Spanberger, a Virginia Democrat were elected to the same class. Although they didn't campaign together on the same issues in 2018, they discovered they had the same alma mater, their favorite basketball team, and the same birthday. They also learned that they could solve some of the problems together.
They introduced legislation in June 2020 to prohibit members of Congress trading individual stocks. After discussing news stories about members of Congress being investigated for stock transactions, they decided to tackle the issue. This was after briefings were given in the early days following the coronavirus pandemic.
Roy reacted a little to the fact that they were political polar opposites during a conversation with both lawmakers.
"It is true that we differ on many things. However, we also agree on many things. ... We're trying to bring together a variety of issues and have sat down over beer (literally) and solved some problems. "The STOCK Act, a law that dates back to 10 years ago, requires stock traders to be disclosed within 45 days. However, Spanberger claims that this approach is not effective.
She stated that it was not enough to be able to tell which members are selling or buying, but also that they should know why they aren't.
NPR was recently informed by the Campaign Legal Center that roughly 50 members of Congress have failed to report on stock transactions in the past year.
The Outside Ethics Group says 7 House Lawmakers didn't disclose stock trades
The Outside Ethics Group says 7 House Lawmakers didn't disclose stock trades
Roy stated that lawmakers are subject to an inherent conflict of interests because they participate in briefings and serve on committees that have an impact on the bottom line.
"If you buy calls from Google, how can Americans have confidence that you will make an objective policy decision about the size and scope Google in relation to antitrust questions?" Roy asks. The Texas Republican responds by pointing to his own experiences. He was involved in discussions to resolve a dispute over a pipeline project that ran through his district. However, he had an investment in the pipeline. He considered selling his shares but realized that any transaction would be fraught with questions.
"But then, I called Ethics [committee] to say, "Wait, I'm beating them now publicly, so it looks like if I unload now it looks as if I'm gaming it while trying to beat him up." I ended up sitting on it, which was to my financial disadvantage, but that's not the point. I am arguing that we shouldn't be stuck in this box.
Both Roy and Spanberger note that their bill would not prevent legislators from investing.
"None would stop you being able engage in free enterprise in the free market, and being able continue to hold your investments. Roy stated that all we are suggesting is to put it in a blind trust, or in broadly traded index funds.
Spanberger said that the entry into federal public service should include change. "Saying we want to affirmatively assure that the American people have trust in us in our decisions and that therefore we cannot own individual stock or that we must put it in blind trust, to me, is a choice that you make when running for this office. Focus on the impact of ban on families
Spanberger's and Roy’s proposal, The Trust in Congress Act, would prohibit lawmakers and their immediate families from choosing individual stocks.
It is possible that someone might say to Americans, "Oh, no! No, no, not, no!" Do not forget that my COVID briefings do not cover the fact that my spouse bought stocks to insert pharmaceutical company name when a pandemic began. People will say, "You insult my intelligence," right? It's bad if it happens, but it's worse if it happens," Spanberger said to NPR.
Roy stated that if members have any concerns, they are willing to discuss the legislation.
"We can solve the problem. It's not about curing cancer. We can all just sit down and find a solution that works for us. You can always change it later.
Both bemoan that the political climate is not conducive to 100% agreement on all details.
Different proposals are being discussed in the Senate and House
Multiple sources close to the discussions say that there is a push to reach consensus in the Senate with both the Democratic caucus and with GOP senators who have introduced bills.
Oregon Senator Jeff Merkley (D-Ore.) made a proposal years ago that would prohibit lawmakers and senior staff members from buying or selling individual stocks. In recent weeks, he has been meeting with Senator Mitt Romney (R-Utah) to discuss his proposals. The Senate companion bill to Roy Spanberger's House bill has been introduced by Sen. Jon Ossoff (D-Ga.) and Sen. Mark Kelly (D-Ariz.). Senator Elizabeth Warren, D.Mass., and Senator Steve Daines (R-Mont.), are currently working on a proposal. Sen. Ben Sasse (R-Neb.) has introduced an ethics reform bill, while Sen. Josh Hawley (R-Mo.) is pushing for a bill that bans trading.
Pelosi refused to discuss the details of which proposal would make it onto the House floor. However, she stated that she wanted to extend any reforms to federal justice.
The bill is co-sponsored by Roy and Spanberger with approximately 45 other people. A bipartisan bill is being promoted by Rep. Raja Krishnamoorthi (D-Ill.), Rep. Alexandria Ocasio Cortez (D-N.Y.), Rep. Matt Gaetz (R-Fla.) and other members of the House. Although their proposal does not include spouses or dependent children, it does include a ban on senior staffers.
Change is called for by grassroots
Roy and Spanberger both stated that this issue is one on which voters of both parties can agree.
Roy remembered how this topic resonates back home with different constituencies. "Of all the issues I discuss, this one receives the most positive reactions from people across the ideological spectrum. No matter if I'm in Austin or the fire breathing hills country, I always get positive reactions to this issue. "
So does Spanberger. "This is the only piece of legislation that people come up to me saying, 'Oh my gosh! I was reading about that bill. This to me is truly remarkable.
This reform, they say, is a simple way to ensure that legislators make decisions free from any financial interest. It's an opportunity for us to say: "When I'm working on legislation or taking a vote, or when I'm in briefing, I don't think, oh! let me wonder how this could be beneficial to me financially. "How can I best serve my constituents?" Spanberger explained. "People should know that we work for them and not our financial stock portfolios."
Roy also agreed that Roy was right. "It would be a very simple statement that you shouldn’t be able get rich off the back of what you do for the people you represent."
Roy and Spanberger both point out that the process they used for developing the bill, which involved talking across the aisle and being open-minded to change, is the same one they believe should be repeated in Washington.
Merkley was one of the first to call for trading bans in Congress when it was discussing the STOCK Act a decade back. He also stated in writing that an update to ethics laws was long overdue.
"We are seeing increasing interest from both sides of this issue, and I'm hopeful this is the moment when we can finally get the issue on the floor. It is time to stop conflicted trading.