Congressional Stock Trading Ban: What You Should Know, And Can It Happen

Democrats and Republicans rarely find themselves in agreement on any social, economic, or political topics. One topic, however, deviates from the norm: stocks and Congress. Both Democrats and Republicans alike support - even overwhelmingly so - a Congressional stock trading ban. In fact, according to the Program for Public Consultation at the University of Maryland’s School of Public Policy, 86% of the nation’s registered voters, with a margin of error of +/- 1.9%, support prohibiting members of Congress from trading stocks. 

Despite the bipartisan support among the country’s eligible voters, the effort is yet to clear the necessary bureaucratic hurdles to take effect. The most notable bill to achieve a Congressional stock trading ban is the “TRUST in Congress Act”. This bill would prevent elected members of Congress, as well as their spouses and dependent children, from trading stocks, bonds, and commodities. Currently, it is stuck in a committee - to truly come to a vote and have a chance of passage, the bill needs to enter the House. To enter the House and bypass the committee work, a discharge petition for the bill has to gather 218 signatures - a majority of the House. Currently, the discharge petition has garnered 79 signatures, and the bill has gotten 80 cosponsors.

Naturally, more obstacles along the bill’s path would require approval by the Senate, where it could potentially face a filibuster, effectively requiring 60 votes for passage. Then, there is potential for the president to veto the bill, which could be overridden with an overwhelming majority of Congress - two-thirds, and the chances of that occurring are slim. Despite its bipartisan support, the bill, at its current stage, faces an uphill battle to become law.

Its passage is especially stalled by intense debate on the necessary scope for a bill banning Congressional stock trading. Certain members prefer the ETHICS Act to the TRUST in Congress Act; the two achieve practically the same goal of preventing representatives, their spouses, and their dependents from trading stocks. A key difference between the ETHICS Act and the TRUST in Congress Act, however, is each act’s method of implementation. The TRUST in Congress Act - considered the more “soft” option - would require members of Congress, as well as their spouses and dependents, to put their stocks into a “blind trust”. This would prevent trading, but permit their management by a third party. Some believe a more direct method is necessary: the ETHICS Act.

This Act would directly ban the ownership of individual stocks, bonds, and cryptocurrencies by representatives, their spouses, and their dependents. It would also impose serious fines on those who disregard the ban, such as a penalty of, at a minimum, 10% of the assets in question. Likely, the reason behind the TRUST in Congress Act being the frontrunner over the ETHICS Act is that the TRUST in Congress Act is, according to some, more practical and evidently less severe.

Regardless of which you support - if either - both bills face a difficult battle. Momentum, however, is growing, and hence hope for its eventual passage. Notable figures that have endorsed the effort include Dusty Johnson (R-SD), Chip Roy (R-TX), Seth Maganizer (D-RI), and Alexandria Ocasio-Cortez (D-NY), as well as many others, including 76 other representatives. The effort has attracted both well-known progressives like AOC and committed conservatives like Chip Roy – the bipartisanship of the bill at this time is evident, and should offer hope to the overwhelming majority of American voters in support of the bill’s passage. At this time, the uphill battle wages on - momentum chipping away at fiscal reluctance.

Works Cited:

Kull, Steven, et al. “Survey: Ban on Stock Trading for Members of Congress Favored by Overwhelming Bipartisan Majority.” DRUM, 1 July 2023, drum.lib.umd.edu/items/6dbca567-f940-4897-bde1-02610cfb5ef6?utm_source=chatgpt.com.