Banning members of Congress from trading stocks has been a hot issue for years, a proposal that’s overwhelmingly popular in both parties. And today, the House Administration Committee will hold a hearing on the STOCK Act to begin exploring the different legislative options to clamp down on such practices by lawmakers.
Dozens of House members have signed onto the Restore Trust in Congress Act, a bipartisan effort led by Reps. Chip Roy (R-Texas) and Seth Magaziner (D-R.I.) to ban the trading and ownership of stocks by members, their spouses and dependents. If adopted, it would be by far the most drastic action taken by Congress on this issue.
Other key sponsors include Reps. Tim Burchett (R-Tenn.), Pramila Jayapal (D-Wash.), Brian Fitzpatrick (R-Pa.), Alexandria Ocasio-Cortez (D-N.Y.), Anna Paulina Luna (R-Fla.) and Joe Neguse (D-Colo.). Overall, more than 90 members have signed onto the proposed measure, giving it a wide base of support in both parties.
“This is an issue that polls over 90% nationally. The American people support this at a high-intensity level,” said Magaziner, who is pushing for a total ban on stock trading by lawmakers after months of talks with his colleagues. “And I really think we’re at a point now where there are no significant policy arguments against doing this.”
There’s also an anvil hanging over the head of Speaker Mike Johnson and other House leaders if they don’t act.
Luna has a discharge petition ready to force the speaker’s hand if the House Administration panel doesn’t immediately move to mark up the Restore Trust in Congress Act. Luna is willing to move ahead if she doesn’t see enough progress.
House Majority Leader Steve Scalise told us he wants to get something done this year “through the committee process.”
The complications. The Roy-Magaziner bill bans members of Congress, their spouses and dependent children from owning stocks, commodities, futures and derivatives. Members and their spouses and kids can own mutual funds, treasuries, state and municipal bonds, and small business equity.
Under this bill, assets must be liquidated within 180 days.
But there are tons of complications here. What if a member’s child inherits stock from a grandparent, for example? They must sell it. In this bill, members of Congress who own a family farm cannot hedge their positions. Also, members of both parties recognize that it will be more difficult to recruit candidates if they have to sell all their investments within 180 days of coming to Congress.
Here’s a good Congressional Research Service primer on current law regarding member stock trading and some of the reform proposals that members have offered this Congress.
The politics. Despite the obvious hurdles in crafting a workable bill, the politics of banning stock trading for members of Congress is undoubtedly attractive.
“This is a dramatically important issue, and I genuinely believe that once we get this to the floor and once it is voted on, I do believe that it will dramatically change the substance of governance here and the decisions that are made,” Ocasio-Cortez told us. “I think that this is a domino that once you tip this over, I think it will introduce a series of other shifts in how legislation is approached here.”
