WASHINGTON POST, EDITORIAL BOARD
Americans don’t need a degree in law or finance to understand that there’s something fishy about members of Congress being allowed to trade individual stocks.
Senators and representatives receive a substantial amount of information that the public does not, including details about how U.S. companies operate and how the government scrutinizes businesses. The fact that so much congressional stock trading goes on — with thousands of stocks traded each year by members of both parties — raises legitimate questions about whether lawmakers are using their access to that information to enrich themselves, rather than to serve the public.
There’s a simple solution to restore trust: Ban trading of individual stocks by members of Congress, something that is gaining bipartisan support on Capitol Hill.
The wisdom of such a prohibition is obvious. A majority of Democratic, independent and Republican voters supports prohibiting lawmakers from trading stocks, a recent Morning Consult poll shows. It’s also widely supported by good governance groups and ethics experts, who point out that while current law forbids any American from trading on “insider information,” it’s very hard to prove someone did that, especially if that someone is a member of Congress who needs that information to make policy decisions.
Reps. Chip Roy (R-Tex.) and Abigail Spanberger (D-Va.) are the lead sponsors of one bill, which they have christened the Trust in Congress Act. They first introduced it last year after news broke that numerous lawmakers were making questionable stock trades in the pandemic’s early days, when Congress was receiving frequent closed-door briefings by health and national security officials. “We said, ‘This is ridiculous. How is this even allowed?’” Ms. Spanberger said.
On the other side of the Capitol, there is also new momentum to make this ban a reality. Sens. Jon Ossoff (D-Ga.) and Mark Kelly (D-Ariz.) just introduced a bill similar to the House measure. Sen. Josh Hawley (R-Mo.) has his own proposal. Several candidates on the 2022 campaign trail have also endorsed the idea.
Yes, there are questions to be worked out. Is it enough to simply ban members of Congress from trading individual stocks? What about their spouses and dependent children? And what about stocks purchased before a member is elected? Should those have to be sold or is it sufficient to put them in a blind trust?
But a good start would be to ban lawmakers and their spouses from trading individual stocks while in office, while still allowing them to invest in mutual funds. That is easy to understand — and implement.
House Speaker Nancy Pelosi (D-Calif.), one of the wealthiest members of Congress, has emerged as one of the biggest roadblocks to the ban. Her husband, Paul, has been a frequent trader over the years.
Last month, Ms. Pelosi stunned many, including this editorial board, when she defended congressional stock trading. She argued it’s enough that lawmakers have to disclosure their trades for the public to see. In reality, 54 members of Congress failed to disclose their trades on time in the past two years, according to an Insider investigation.
It’s time to put a stop to this highly questionable behavior. If lawmakers want to play the market, they should select a different career path.