Momentum builds to ban lawmakers from trading stocks

view original post

Some progressive Democrats and MAGA Republicans are uniting on a proposal to ban sitting lawmakers from trading individual stocks, although it’s unlikely that leadership will bring the bill up for a vote.

Why it matters: Members of Congress have great power to move stock prices, and great financial incentives to do so.

Get market news worthy of your time with Axios Markets. Subscribe for free.

  • “One line in a bill in Congress can be worth millions and millions of dollars,” former Rep. Brian Baird (D-Ore.) told 60 Minutes in 2011.

  • Baird spent years advocating for The Stock Act, which prevented lawmakers from trading on inside information and increased financial disclosures. It became law in 2012, after being passed on a bipartisan basis, but later was watered down and is rarely enforced.

Driving the news: Sen. Jon Ossoff (D-Ga.) plans to introduce an ethics bill that would ban lawmakers, their spouses and dependent children from trading individual stocks while in office, not just if they have inside information.

  • Ossoff is in talks with potential Republican co-sponsors, a Democratic told Axios, without confirming specific candidates.

  • Sen. Josh Hawley (R-Mo.) on Tuesday tweeted his support for a trading ban, although it’s not clear if he’d endorsing including spouses and family members (who are included in Ossoff’s more stringent bill). Hawley’s office didn’t respond to a request for comment.

  • Another one to watch is Sen. John Hoeven (R-N.D.), the only Republican senator who has reported using a qualified blind trust for his personal investments.

Over in the House, Republican Leader Kevin McCarthy (R-Calif.) is interested in legislation to limit or ban lawmakers from trading stocks if the GOP wins control of the House, according to Punchbowl News. One such bill already exists, with more than two dozen co-sponsors.

  • Meanwhile, House Speaker Nancy Pelosi (D-Calif.)— whose husband Paul Pelosi recently bought millions of dollars worth of tech stocks — refused to support a ban on legislators’ market activity.

  • “We’re a free market economy,” she told reporters last month. “[Lawmakers] should be able to participate in that.”

Senate candidates from both parties have hopped on the ban bandwagon. Among them are Democrats Tom Nelson (Wisc.) and John Fetterman (Pa.), both of whom this week endorsed Ossoff’s proposal, and Republican Blake Masters (Ariz.).

  • “Democrats and Republicans equally take advantage of this and it is wrong,” Nelson tells Axios. “They don’t need to be trading like Gordon Gekko or Bud Fox. Just get mutual funds and CDs like the rest of us. How difficult can that be?”

The bottom line: The unusual coalition behind the most recent effort to stop lawmakers from trading stocks may not immediately translate into law, but it puts pressure on Congress to address one of Washington’s most glaring and persistent financial conflicts.

Like this article? Get more from Axios and subscribe to Axios Markets for free.

Related Posts