On Wednesday, four U.S. senators from both parties announced a bipartisan agreement aimed at pushing forward a bill that would prohibit members of Congress and other elected officials from engaging in stock trading. The legislation requires legislators to divest all previously purchased stocks before the start of the next Congress session in 2027. The scope of the bill covers members of Congress, the President, Vice President, their spouses, dependent children, and applies to securities, commodities, futures, and trusts.
Violators would face fines equivalent to either their monthly salary or 10% of the value of each improper investment. Under this bill, members of Congress would still be allowed to invest in mutual funds or collective securities investments like Exchange-Traded Funds (ETFs).
Senators Jeff Merkley (Democrat-Oregon), Gary Peters (Democrat-Michigan), Josh Hawley (Republican-Mozambique), and Jon Ossoff (Democrat-California) announced their agreement on the legislation.
Chairman of the Homeland Security and Governmental Affairs Committee, Peters, stated that his committee would vote on advancing the bill in the Senate on July 24, calling it the first time the Senate committee would review such legislation. Peters emphasized, “Americans should trust that the decisions their federal elected officials make are in the best interest of the American public and not for any individual’s financial gain.”
During a press conference at the Capitol, Ossoff stated, “This is necessary. Members of Congress should not be playing the stock market while legislating and handling confidential and privileged information. This should have been done a long time ago.”
Merkley pointed out that members of Congress made profits exceeding $1 billion from stocks last year, with their investment portfolios consistently outperforming the average levels. He remarked, “Due to this phenomenon, even investment funds mimicking congressional investments have emerged.”
Merkley also expressed concerns about potential conflicts of interest in lawmakers’ stock trading. He said, “You have investments concentrated in fossil fuels, renewable energy, banking stocks, or pharmaceuticals, while drafting bills, preparing amendments, or voting on legislation that impacts these investments.”
Hawley stressed, “I don’t care if you have so-called insider information or information not accessible to the public. Why should members of Congress spend time on day trading instead of focusing on the priorities we were elected to achieve and care about for the American people?”
Meanwhile, in the House of Representatives, Representative Abigail Spanberger (Democrat-Virginia) on Tuesday sent a joint letter from 19 members of both parties to Speaker Mike Johnson and Minority Leader Hakeem Jeffries, urging a vote on the bipartisan TRUST in Congress Act. The Act aims to effectively ban personal stock trading by lawmakers and requires lawmakers, their spouses, and dependent children to transfer stock assets to blind trusts to prevent them from profiting through insider trading without having to fully divest.
Concerns about lawmakers using their influence for stock trading have long existed. In 2012, Congress enacted the STOCK Act, requiring lawmakers to disclose any trades over $1,000 to curb congressional insider trading.
Spanberger noted in the letter, “Recent investigations found that in the 117th Congress, one in seven lawmakers violated the STOCK Act, 97 lawmakers traded stocks of companies affected by their committee responsibilities from 2019 to 2021, and in 2022, lawmakers outperformed the S&P 500 index by 17.5%.”
Lawmakers have previously introduced similar bills. Recent bills include the Ban Congressional Stock Trading Act proposed by Ossoff and Senator Mark Kelly (Democrat-Arizona) in September last year. In July of the same year, Hawley and Senator Kirsten Gillibrand (Democrat-New York) introduced the bipartisan Ban Stock Trading for Government Officials Act.