On Wednesday, a bipartisan, bicameral group of legislators introduced a bill that would ban members of Congress and their spouses from owning and trading stocks.
The Bipartisan Ban on Congressional Stock Ownership Act is the first bipartisan stock trading ban to be introduced in the Senate. The bill was introduced by Senators Elizabeth Warren (D-Massachusetts) and Steve Daines (R-Montana) and Representatives Pramila Jayapal (D-Washington) and Matt Rosendale (R-Montana). Two Senate Republicans have also cosponsored the bill.
The proposal goes further than previous bills, forcing members of Congress and their spouses to divest from all stocks other than widely held, diversified investment funds like mutual funds. Such investments could still be traded as long as there are no conflicts of interest. If members are found violating the law, they would be fined up to $50,000 per infraction.
This legislation goes a step further than the bill introduced by Senators Jon Ossoff (D-Georgia) and Mark Kelly (D-Arizona) last month, which bans stock trading for lawmakers and their families but allows them to retain ownership of their stock portfolios as long as they are put in a blind trust while lawmakers are in office. If a lawmaker is familiar with their portfolio, in other words, they could still influence their stocks even if they aren’t in direct control of them.
The bipartisan bill’s sponsors emphasized that the proposal is a critical measure to increase transparency and trust in Congress.
“No one should ever have to wonder whether their Member of Congress is working for the public interest or their own financial interest,” Warren said.
Jayapal said that the bill could reduce corruption in the legislative branch. “Members of Congress were elected to serve the people, not their personal financial interests. But as long as members and spouses are allowed to hold and trade stocks, we keep the door open to corruption – and that cannot stand,” she said. “It’s good policy, and it’s simply the right thing to do.”
The Project On Government Oversight (POGO), a government watchdog, praised the bill, noting that stock trading within Congress is an ethical concern. “Capitalizing on their privileged positions and their access to nonpublic information through inappropriate stock trading is one glaring example of this problem,” said Danielle Brian, POGO’s executive director.
Warren has previously introduced legislation that would also bar top federal officials like judges from trading stocks, but currently, bans on stock trading for members of Congress have the most momentum. Congress has had its fair share of stock trading scandals in the past few years, and reporting has found that members of Congress regularly violate existing stock transparency laws.
With rare bipartisan support in the House and the Senate, and support from the leaders of both chambers, the bill or legislation like it may have a shot at being passed. On Wednesday, Pelosi instructed members of Congress to draft a bill for the ban that she would bring to a vote soon.
Still, the legislation could face a few hurdles. The idea appears to have the support of most Democrats and some Republicans in the House, but Senate Republicans are split on the matter. Senate Minority Leader Mitch McConnell (R-Kentucky) has said that he hasn’t decided either way on the issue, though far right Republican firebrands like Josh Hawley (R-Missouri) have signaled their support for a ban. The bill would need 60 votes to overcome a filibuster in the Senate.