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It’s rare to find areas of agreement between President Donald Trump and former House Speaker Nancy Pelosi. But they’re both supporting a congressional bill that will ban members of Congress and their households from trading stocks.
The legislation, which cleared its committee of jurisdiction in late July, has broad bipartisan support and will help root out public corruption while restoring Americans’ confidence in Congress.
Common sense would suggest that Congress shouldn’t be actively trading stocks and bonds while they’re holding office. And 86% of those surveyed in 2023 as part of a University of Maryland study favored a ban on congressional stock trading, with Republicans and Democrats showing nearly identical levels of support.
As Treasury Secretary Scott Bessent emphasized in an Aug. 14 interview, the credibility of the House and Senate is at stake when members trade individual stocks. He highlighted the “eye-popping returns” some members have earned, noting that “every hedge fund would be jealous of them.”
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From the perspective of a Treasury official, this issue goes beyond ethics. It touches the integrity of our financial system.
Markets rely on trust, transparency and a level playing field. When members of Congress trade stocks with access to information or influence that ordinary investors don’t have, it undermines public confidence in both government and the economy.
Treasury leadership has a vested interest in ensuring that policy is made to serve the public good, not to generate personal profit, because the credibility of the United States as a financial steward depends on it.
In addition to President Trump and Pelosi, there are several other unlikely bedfellows in Congress supporting the ban. They include liberals like Rep. Alexandria Ocasio-Cortez, D-N.Y., and Sen. Ron Wyden, D-Ore., and conservatives like Rep. Chip Roy, R-Texas, and Sen. Josh Hawley, R-Mo. Notably, both Mike Johnson, R-La., the House speaker, and Hakeem Jeffries, D-N.Y., the minority leader, support the ban.
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Pelosi’s support for the legislation is noteworthy given her families’ well-documented history with stock trading. Last year, her husband, Paul, made headlines by selling between $500,000 and $1 million worth of Visa shares just a few weeks before the Justice Department brought a civil antitrust suit against the company. The transaction led to speculation that Paul Pelosi may have been tipped off by his wife, or contacts in the Biden administration, about the likelihood of a filing against Visa.
Filed just six weeks before the presidential election, the Visa suit’s monopoly claim was undermined by a simple fact: the network faces robust competition from other debit card companies, as well as newer payment networks such as Zelle and Venmo. But as the legal process unfolds, the issue of congressional stock trading remains. And the volume of activity is breathtaking.
Last year, 120 members of Congress made more than 9,400 trades, according to Capitol Trades, a platform that tracks market trading by U.S. elected officials. The performance by some of the members suggests they should move to Wall Street. The top 10 – six Republicans and four Democrats – all had returns exceeding 70%, according to another platform, Unusual Whales. And this was in a year when the S&P 500 only returned 25%.
There is destined to be even more trading this year. Through Aug. 19, there had already been nearly 9,200 trades, involving more than $395 million.
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Is this trading influencing public policy? It’s hard to know, definitively. But a few years ago, the New York Times examined trades made by members of Congress from 2019 through 2021. The paper reported that there were 97 senators or representatives “who reported trades by themselves or immediate family members in stocks or other financial assets that intersected with the work of committees on which they serve.”
In one instance, a California congressman disclosed that his wife sold Boeing shares on March 5, 2020. That was just one day before a committee he was a member of issued a report criticizing the company in connection with two fatal crashes of its 737 Max jet.
It’s rare for members of Congress to be prosecuted for market trading, but not unheard of. In 2019, a congressman from New York, Chris Collins, resigned after pleading guilty to having shared confidential company information with his son and lying about it to federal agents. He was sentenced to 26 months in prison (and later pardoned by President Trump).
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Stock trading by members of Congress, and the suspicion that activity engenders, contributes to distrust in government. Last year, a Pew survey found that just 2% of Americans believed the federal government would do what is right “just about always” and just 21% said, “most of the time.” That distrust is unhealthy for the country’s democracy, whether you’re a Republican or Democrat, and makes it more difficult for either party to move its agenda forward.
Banning members of Congress from trading stocks would help restore trust in the federal government. A ban would also be an opportunity for members of both parties to come together in support of a measure that will benefit the entire country. That can’t happen soon enough.
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