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It was one of the more puzzling moves in recent political history.
Instead of enacting a slam-dunk policy win supported by broad majorities of the public—a ban on members of Congress trading stocks—former Speaker Nancy Pelosi (D-CA) and other Democratic leaders dragged their feet last year and ultimately did nothing.
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With a Republican takeover of the House, most lawmakers thought their opportunity for action had passed.
But not even six months into the new Congress, an unexpected thing has happened: A determined bipartisan coalition has used a fresh raft of suspiciously timed member stock trades to put renewed pressure on Speaker Kevin McCarthy (R-CA) to act.
For a legislative effort that much of Capitol Hill had left for dead, there’s perhaps more energy behind it now than at any point in over a year.
While McCarthy hasn’t commented much publicly on a ban since winning the speakership—he actually leveraged the issue to needle Pelosi last year—there are promising signs of action.
McCarthy’s office didn’t respond to a request for comment, but as bipartisan support continues to grow, key GOP lawmakers aren’t ruling out advancing a stock ban in the coming months.
Rep. Bryan Steil (R-WI), who chairs the House Administration Committee with jurisdiction over the issue, told The Daily Beast on Wednesday that he’s “not taking anything off the table at this time.”
“There’s a real opportunity for us to explore ways we can, at the end of the day, enhance voters’ confidence in what is taking place here on Capitol Hill,” Steil said.
Rep. Brian Fitzpatrick (R-PA)—a top sponsor of one stock ban proposal—expressed optimism about getting something done this Congress.
“We’re not getting any sharp pushback,” said Fitzpatrick, who co-chairs the centrist Problem Solvers Caucus. “It’s more like the devil’s-in-the-details kind of thing.”
Since January, the coalition of lawmakers supporting action has grown. From Rep. Alexandria Ocasio-Cortez (D-NY) to Rep. Matt Gaetz (R-FL), members across the political spectrum have signed onto bills to ban members trading stocks.
Part of the new energy is explained by a bonanza of suspiciously timed trading: In recent months, at least 10 members bought and sold shares of bank stocks around recent regional bank collapses, a subject on which federal officials and banking executives have briefed Congress.
“It’s just one after another,” Rep. Abigail Spanberger (D-VA), a sponsor of leading stock ban legislation, said of the most recent trading scandals. “Certainly, there have been a lot of conversations among colleagues about—yet again, we find ourselves in this place.”
The fact that lawmakers in either party would pass up an obvious political win—and an opportunity to restore trust in a deeply distrusted institution—remains baffling to many supporters of the stock bans.
But despite that sense of incredulity growing among members and their constituents, the same factors that slowed stock legislation last year remain in this new Congress.
Reluctance to curtail member stock trading is not, strictly speaking, partisan. Senior members in both parties don’t want to go through the hassle of reworking their stock portfolios. And many don’t respond well to the idea that they shouldn’t be able to supplement their government salaries with investments—above-board ones, of course.
Republicans, however, might be more philosophically disinclined toward the basic principle, which could be one of the biggest obstacles for supporters of a ban to navigate.
“I’ve got concerns, constitutional concerns, over that because the right to engage in commerce is an inherent part of the Constitution that belongs to everybody,” said Rep. Barry Loudermilk (R-GA), who sits on the Administration Committee.
Instead of passing a ban, Loudermilk said lawmakers could tighten disclosure requirements for stock activity. He also suggested there wasn’t much of a problem to begin with, given that members have been investigated and charged with insider trading before. That is true, though the vast majority of members who violate existing stock rules face no penalties.
The Senate also remains a challenge, where 60 votes are needed to pass legislation. Few Republicans in that chamber have lent their support to stock ban proposals.
But the House could drastically change that dynamic by passing a bill. The more immediate question for Republicans, and really for McCarthy, is whether the obvious political upside to moving a stock ban might one day overwhelm the clear inertia among members when it comes to regulating their own portfolios.
When he was the Minority Leader last year, McCarthy was happy to use the stock ban push to tweak his nemesis Pelosi, who was always chilly toward the idea and ultimately slow-walked it until the clock ran out.
Like many Republicans, McCarthy claimed prolific stock trading by Pelosi’s husband was the reason she stifled the bills. But in doing so, he seemed to occasionally endorse the idea behind them; last July, for instance, he told reporters, “I think we need to bring trust back to this institution.”
In the 2022 election that handed the GOP a House majority, many Democrats wished they could have campaigned on telling voters they had finally put an end to stock scandals. By leaving the issue on the table, however, they’ve given McCarthy—a political creature known for devouring polls and campaign strategy memos—something to pick up.
Asked if Republicans recognize the political rewards at play, Fitzpatrick—who has won a number of tough races himself—had a quick response. “I do,” he said. “I put it on every single letter.”
Democrats, like Spanberger, who all but begged their leadership to take the win last year, believe that McCarthy is hardly incapable of recognizing one.
“I’m never going to give Speaker McCarthy advice on how he could perhaps charge his own path and differentiate himself from predecessors,” Spanberger said, perhaps an implicit nod to Pelosi.
“But the politics on this are phenomenally good,” she continued. “He’s said all the things one would want to hear him say—now he has to bring it.”
For now, McCarthy and his team are focused on negotiating a debt limit deal with President Joe Biden and Democrats. There has been no hearing focused on the stock ban bills since the new Congress convened in January.
But whenever the debt limit issue is resolved, lawmakers on both sides think they will have room to make progress on a rare bipartisan priority.
Steil, the GOP chairman with jurisdiction on the issue, said he is weighing various proposals before deciding what, if any, bill to formally consider. Notably, members from both parties have signed on to competing bills that offer slightly different solutions.
The bill with the broadest support is the TRUST In Congress Act, which has been introduced in the past three congresses by Spanberger and Rep. Chip Roy (R-TX). It currently has some 55 cosponsors, ranging from the far right to the progressive left, powerful senior members to new freshmen.
The legislation would require members, their spouses, and their dependent children to either sell their individual stocks, or put them in a qualified blind trust while serving in office.
Another main proposal is the ETHICS Act, which is being led by Fitzpatrick, as well as Reps. Michael Cloud (R-TX) and Raja Krishnamoorthi (D-IL), and has cosponsors like Ocasio-Cortez. That bill aims to offer lawmakers more options for where they can park their investment assets during their time in Congress.
The fact that lawmakers would have to smooth out those differences deepens the challenge. Indeed, that was largely the dynamic that helped Pelosi and her allies draw out the legislative process last year, claiming supporters of the bans needed to get on the same page.
Still, even Republicans who have not signed onto any specific proposal are sharing the general sentiment that doing something would be preferable to doing nothing.
Rep. Don Bacon (R-NE), a leading GOP moderate, said he was “generally supportive” of the idea and would be inclined to vote in favor of a bill.
Being able to trade stocks as a member of Congress, Bacon said, “just leaves you open for speculation, even if you have no malice or wrong intent.”
