It’s time to ban Congress from trading stocks

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U.S. lawmakers have a long to-do list before they take their August break and then focus mostly on the November midterm elections, but supporters of a ban on single-stock trading in Congress sound optimistic the lawmakers can pull it off , to solve this problem.

“I think there is a great dynamic. It’s just not public,” said Donald Sherman, senior vice president and chief counsel of Washington’s Citizens for Responsibility and Ethics (CREW), a monitoring group.

“As far as I know, there is a compromise bill in the Senate that will be published relatively soon. It’s a compromise in that it combined elements from many people’s calculations.”

Sherman said by “soon” he means “this time next month.”

The CREW expert also pointed to some advances in the House of Representatives that followed those of the House Administrative Committee Hearing on April 7th on possible new restrictions on the purchase and sale of individual shares by the legislature. Sherman said he received “fairly robust” additional questions from that panel earlier this week after testifying at that hearing – “which to me suggests members are in the weeds about what comprehensive legislation might look like.”

“I would think that the Senate would aim to get something across the line before the August recess so that the House can then act and pass something in the fall,” Sherman added.

“This is an issue that congressmen will either run to or run from in November. So I think this schedule is useful to ensure members can return to their districts in the fall and show they’ve gotten this across the finish line.”

About 63% of all voters support a ban on stock trading for the legislature, with 69% of Democrats and 58% of Republicans in favor, according to a recent study Morning Consult/Politico poll. But the topic is not so urgent, since, according to a. focus on inflation, Russia’s invasion of Ukraine, immigration, climate change and electoral laws Quinnipiac University survey.

The series of bipartisan bills aimed at halting congressional trading in individual stocks was spurred in part by reports of lawmakers buying and selling stocks after being privy to warnings in the early days of the COVID-19 pandemic — together with news about it Many legislators have been late in making their disclosures. Other reports have additional questions raisedincluding a MarketWatch article in January that revealed how Congress resembled a Wall Street trading table last year, with lawmakers and their family members trading an estimated $355 million worth of stock as the Market SPX,


Senate Majority Leader Chuck Schumer, the Democrat from New York, told reporters last week that he hopes to vote on a stock trading bill.this year.”

“It’s a sign that there’s still some momentum, but there’s no desire to commit to any particular timeline,” said Jennifer Schulp, an expert at the Cato Institute, a libertarian think tank.

“I see this as something that could shift pretty quickly,” she added, implying that the timing for a vote “could very easily move to June or July if it becomes a priority.”

Schulp, the director of financial regulation studies at Cato’s Center for Monetary and Financial Alternatives, said she does not support Congress banning individual stock trading because it would not restore trust in Congress or address other conflicts of interest.

She advocates measures that would increase transparency, such as B. Reducing the time between a trade and required disclosure or increasing penalties for improper filing of disclosures. She was also a witness at the April 7 hearing.

While Congress is busy addressing inflation, an infant formula shortage and other issues, the push for a stock trading ban “is not at odds with those other issues,” said Liz Hempowicz, director of public policy at the Project on Government Oversight (POGO), a watchdog who has been lobbying a ban that would cover lawmakers, their spouses and loved ones.

“I think it’s all connected, and the public needs to know that Congress can approach these kitchen table issues with clear eyes and with the public interest front and center,” Hempowicz said. The alternative is that Americans end up concerned that lawmakers are treating a matter “with an eye on their own wallets,” she said.

Public sentiment in favor of a ban is helping them be “cautiously optimistic” about getting it, added Hempowicz, who was also among the April 7 witnesses.

“Things are moving. It’s just behind the scenes,” she said.

Critics of a ban say it would deter people from running for office or would be difficult to implement, especially when blind trusts are being considered. Another argument is that US lawmakers should understand what it’s like to invest in stocks since they decide stock market policy.

The hiring of Rep. Spanberger, the role of President Biden

A House lawmaker who co-sponsored one of the bills that would end congressional trading in individual stocks sounded somewhat disheartened in an interview this week, though she seemed enthralled by Schumer’s comment on a 2022 Senate vote.

“Hopefully we’ll see them lead by example – faster than we might see action in the House, which saddens me as we’re supposed to be the house of the people,” said Virginia Democratic Rep. Abigail Spanberger, referring to the Senate.

“But if that’s the reality then I look forward to them doing the right thing and then hopefully hopefully the house will follow suit.”

The Senate is dealing with “too many competing ideas,” but the problem in the House of Representatives “isn’t about legislation,” she said. “The problem is that the leadership of the House of Representatives does not want to postpone this. That’s the problem in the house.”

House Speaker Nancy Pelosi, the California Democrat, defended stock trading by lawmakers and their spouses in December, but then reversed herself to some extent in January by asking the House Administrative Committee to consider a possible ban on congressional trading, and said, “I just don’t believe in it. But if members want that, I’m fine with that.”

Pelosi ranked the eighth largest trader among more than 500 members of Congress last year with $12 million in purchases and no sales. That’s according to MarketWatch’s January report, which a Capitol acts Analysis of disclosures filed by members of Congress for their trading activities or for purchases and sales by their family members.

Democratic Rep. Abigail Spanberger of Virginia speaks at a news conference April 7 about the ban on members of Congress from trading in stocks. She is joined by (LR) Sen. Jeff Merkley (D-OR), Rep. Alexandria Ocasio-Cortez (D-NY ) and Rep. Joe Neguse (D-CO).

Getty Images

When asked what she’s doing to win Pelosi over, Spanberger said, “Get more co-sponsors.” Her bill, introduced with Republican Rep. Chip Roy of Texas, has gained traction more than 60 co-sponsors – “Quite a lot of co-sponsors for a bill that doesn’t go to a vote immediately,” she said.

The Virginia Democrat criticized other lawmakers for buying shares in pharmaceutical or cleaning supplies companies during the outbreak of the COVID pandemic and buying shares in a defense company that “will produce massive quantities of specific weapons for a war in Ukraine we knew was coming.” .”

“The fact that there are members of Congress who think they are ‘right’ to be able to buy stock, meaning profiting from this information, to me is just unconscionable,” Spanberger said.

“I continue to build a coalition of people who believe this reform is necessary. But I can’t change everyone’s mind. And unfortunately there are numbers behind why some people might not be inclined to support it.”

An additional hurdle could be the 50-50 Senate filibuster rule, which requires 60 votes to end debate on most items, leaving the minority party able to stymie the efforts of the majority. but some Republican senators have backed bills focused on congressional trade, including Tennessee’s Marsha Blackburn, Montana’s Steve Daines, South Carolina’s Lindsey Graham and Missouri’s Josh Hawley.

Another watch group pushing for a ban plans to involve President Joe Biden in hopes it could spark action.

“We will send out a letter asking that he enforce this and basically follow through on his campaign promise to push for legislation where Congress will not be influenced by their personal financial holdings,” said Kedric Payne, senior director of ethics and General Counsel at the Campaign Legal Center (CLC). This refers to a Biden’s campaign promises to work with Congress to enact legislation that prevents legislatures from being influenced by these holdings.

That letter, signed by various groups, is expected to be sent this week or next, according to Payne.

The CLC expert linked the passage of the 2012 STOCK Act to a strong push from then-President Barack Obama during a State of the Union address. This law requires the legislature to disclose stock trades and is intended to help deter politicians from insider trading, but is considered insufficient by some watchdog groups.

“A decade ago it was recognized” that the president “could provide a push from outside the legislature, and that’s what needs to happen now,” Payne said.

“This problem of perceived conflicts of interest in stock trading is not going away, and it will only get worse if Congress doesn’t act now,” he added.

Now read: These US lawmakers are considered the biggest traders in hot stocks like Apple and Tesla

And see: Congressional Crypto Traders: The US lawmakers who buy and sell digital currencies It’s time to ban Congress from trading stocks

Brian Lowry

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