A push to ban stock trading by members of Congress is gathering momentum, with prominent lawmakers including Senate Majority Leader Chuck Schumer seeking to curb the controversial practice.
Those who oppose Congressional stock trading say lawmakers have access to non-public information that could give them an unfair advantage when trading individual stocks. But the details in the fine print of any ban will likely raise complications — a point that an increasing number of lawmakers are making.
Rep. Patrick McHenry (R-NC) joined Wednesday and laid out some of the problems he sees with banning lawmakers from trading stocks. “Congress should suffer under the same laws as every other American suffers under if they’re bad or gets the benefit of if they’re good,” he said.
While McHenry doesn’t oppose a ban outright, he expressed clear skepticism, pointing to a scenario where a child of a member of Congress wants to trade.
“If you have children that are in their 20s and they’re doing things like day trading because they have a couple of bucks, or they’re investing in GameStop, what the hell does that have to do with what their parents do?” he asks.
Rep. Ed Perlmutter (D-CO) joined Friday and added additional concern, especially on the family trading provisions. Perlmutter faced criticism for disclosing trades his wife made a couple days later than required, but he says she should have the right to trade stocks.
“My wife ought to be able to trade her $50,000 that she got after a lifetime of teaching,” he said, noting it was traded as a part of her pension.
Overall, Perlmutter says he is reviewing bills but argues that Congress-specific transparency provisions in place are working and insider trading laws also apply to members of Congress. “I guess I’m going to be a tougher sell on it than some others are,” he said. “I don’t know that [more restrictions] improves things any.”
McHenry and Perlmutter are far from the lawmakers concerned about a ban. Lawmakers of both parties have raised both colorful objections as well as real concerns about how it could be implemented.
‘This whole concept is bulls**t’
The criticisms come as a bipartisan group of lawmakers push for a bill banning or curbing Congressional trading. Sen. Mark Kelly, who co-sponsored an outright ban, recently came on Yahoo Finance to say the trading happening right now in Congress is “not right.” Rep. Jake Auchincloss (D-MA) added in another interview that the perception of corruption “is an unacceptable diminution of the trust that [voters] could have in this institution.”
And a host of Republican lawmakers from Sen. Josh Hawley (R-MO) to House Minority Leader Kevin McCarthy (R-CA) have also pushed for a ban.
Leading the charge when it comes to colorful responses opposing a ban is Elaine Luria (D-VA), who offered her take to Punchbowl News this week. “So my thoughts on it, you know, I think this whole concept is bulls**t because I think that, why would you assume that members of Congress are going to be inherently bad or corrupt?” she said.
Luria notes that the STOCK Act is already on the books and requires lawmakers to disclose their trades in a timely manner. (An investigation from Insider found 55 members of Congress have violated provisions in the bill, however. ) “I’m very strongly opposed to any legislation” that would ban trades outright, she said.
Sen. Tommy Tuberville (R-AL) has also weighed in to The Independent. “I think it’s ridiculous. They might as well start sending robots up here,” he told the paper, noting that a ban “would really cut back on the amount of people that would want to come up here and serve.”
Tuberville, a former football coach for Auburn University, has violated the timely transparency provisions in the STOCK Act a whopping 132 times, according to Insider.
Others have made a similar point. Sen. Pat Toomey (R-PA) has said of the efforts: “I think it’s a solution in search of a problem, and one more thing that makes it unattractive for some people to serve in Congress.”
Current law is ‘apparently not sufficient’
Others support the efforts but with deep caveats. Much attention was paid this week to House Speaker Nancy Pelosi who retreated from her previous position.
But looking in full at how she discussed the issue during her weekly press conference Wednesday shows she’s wary of an outright ban. “We have to tighten the fines on those who violate the STOCK Act,” she said. “It’s apparently not sufficient to deter behavior.”
Her comments suggest she might tend towards something like an idea pushed by Sen. Kirsten Gillibrand (D-NY) and Rep. Katie Porter (D-CA) dubbed the STOCK Act 2.0, which notably doesn’t ban trading but strengthens transparency provisions and increases restrictions.
Pelosi also strongly wants any limits to be government-wide and apply to the judicial system, as well.
“There’s another consideration: as you know, in the Executive branch, when they divest of their stock, they don’t pay capital gains,” Pelosi said. “That’s an interesting feature.”
Comments from another lawmaker this week, Rep. Cindy Axne (D-IA), point to yet another level of detail still to be worked out. She worried that a ban would make it harder for members of Congress to hold something like a 529 account, which includes stocks inside it.
This story has been updated with additional comments from lawmakers.