Senate Committee Approves Congress Stock Trading Ban: What's Next?

The U.S. Congress is closer than ever to enacting a congressional stock trading ban as a bill on the matter cleared committee on Wednesday. A bipartisan group of senators announced a deal to advance the bill earlier in July.

What Happened: The bill cleared the Senate Homeland Security & Governmental Affairs Committee on Wednesday morning according to a post by journalist Andrew Desiderio. The vote was eight to four.

A bipartisan group of Committee Chair Gary Peters (D-Mich.), Josh Hawley (R-Mo.), Jon Ossoff (D-Ga.), Rick Scott (R-Fla.), Tom Carper (D-Del.), Maggie Hassan (D-N.H.), Kyrsten Sinema (I-Ariz.), Jackie Rosen (D-Nev.), Roger Marshall (R-Kan.), Laphonza Butler (D-Calif.) and Richard Blumenthal (D-Conn.) voted to advance the bill.

Four Republicans voted no: Ranking Member Rand Paul (R-Ky.), Ron Johnson (R-Wis.), James Lankford (R-Okla.) and Mitt Romney (R-Utah). Romney is the co-founder of Bain Capital, an investment firm.

The Ending Trading and Holdings in Congressional Stocks (ETHICS) Act would prohibit members of Congress from buying and selling stocks 90 days after the bill is signed. It would also ban spouses and children of members of Congress from trading stocks starting in 2027. It institutes penalties for violation of the law.

The bill was first introduced by Sen. Jeff Merkley (D-Ore.).

Why it Matters: Congressional stock trading has become increasingly controversial in recent years given a perceived conflict of interest between legislating and profit-making.

The trades of many politicians — including former House Speaker Nancy Pelosi (D-CA) — have received attention for their high returns and alleged misconduct. Many websites, including Benzinga, allow investors to track governmental trades.

The bill will now go to the Senate, but faces an uphill battle.

Axios reported Senate Democrats will attempt to push the bill through before the November election. There is insufficient time left on the legislative calendar for a vote before November. It is therefore possible that legislators will attach the ETHICS Act as an amendment to another bill. Merkley said there is still strong opposition to the bill among some members of Congress.

The bill also has support from some members of the House. Congressman Ro Khanna (D-Calif.) told Benzinga in May that he supports a stock trading ban. He called the actions of his colleagues who trade in financial markets "shameful."

A congressional stock trading ban could be a unifying policy in a polarized country. Eight-six percent of Americans support a ban, according to the University of Maryland School of Public Policy. It is rare for matters to receive bipartisan support of this magnitude.

Also Read:

• 10 Best Stock Traders In Congress In 2023 (Spoiler: Nancy Pelosi Has Reentered The Chat)

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