How is congressional stock trading like the weather? Everyone complains about it. Yet nobody ever does anything about it.
Almost exactly one year ago (on July 29, 2022), then-House Minority Leader Kevin McCarthy suggested he would support this reform, saying, “What I’ve told everybody, we will come back, and we will not only investigate this, we will come back with a proposal to change the current behavior [stock trading].”
We’re still waiting, Kev. And I’m not the only one who has noticed his lack of action. “Speaker McCarthy needs to put a stop to the culture war nonsense his party is pushing and deliver on the promise he made last year–common sense, bipartisan reforms that a majority of Americans support,” said Rep. Angie Craig (D-MN) in a statement.
Craig is one of six members, which include Reps. Katie Porter (D-CA) and Abigail Spanberger (D-VA), who signed a letter on the one-year anniversary of McCarthy’s promise, urging him to honor his commitment this week.
Keep in mind, this proposed reform is wildly popular.
According to a survey conducted in May by the Program for Public Consultation (PPC) at the University of Maryland’s School of Public Policy, 87 percent of Republicans and 88 percent of Democrats favor banning members of Congress (and their spouses and dependents) from trading individual stocks.
You couldn’t get 87 or 88 percent of Republicans and Democrats to agree on Dolly Parton’s music or their favorite pizza. And this survey result is merely the latest in what is a steady drumbeat of support for banning congressional stock trading.
On July 19, Sens. Josh Hawley (R-MO) and Kirsten Gillibrand (D-NY) announced bipartisan legislation to do just that.
If you’re keeping score, (a) the American public overwhelmingly wants to do this, and (b) there is interest in both chambers of Congress and both major political parties.
Shouldn’t this ban be a slam dunk for a political leader looking to score a legislative victory?
Apparently not. And McCarthy isn’t the first House Speaker to be accused of merely feigning interest in the subject.
“Almost everybody is theoretically in favor of this reform, yet, so far, yet there has not been the political will to coalesce around one bill.”
In December 2021, in response to New York Rep. Alexandria Ocasio‐Cortez’s tweet saying, “It is absolutely ludicrous that members of Congress can hold and trade individual stock while in office,” then-Speaker Nancy Pelosi pushed back on efforts to ban stock trading for Congress, replying, “We are a free‐market economy.”
Pelosi ultimately caved to pressure from her own party. But rather than embracing an existing bill that might have passed, such as the one authored by Spanberger, Pelosi tapped an ally, Rep. Zoe Lofgren (D‐CA), to write a new bill.
The results left reform supporters accusing her of opening the door to “fake” blind trusts.
“The Speaker has accomplished something I’d have thought impossible,” lamented Walter Shaub, director of the Office of Government Ethics during the Obama administration. “She has produced a congressional stock trading ban I must oppose.” Spanberger characterized the debacle as “a failure of House leadership.”
Did Team Pelosi introduce a poison pill into this bill to kill it? At least one Republican seemed to think so.
“I think there’s a lot of effort to purposely, kind of, make this die under its own weight,” declared Rep. Chip Roy (R-TX) who co-sponsored Spanberger’s bill. “There are a lot of people in the body who would rather not restrict their ability to continue to trade.”
Fast forward ten months, and we seem to be witnessing another failure of House leadership, at least as it pertains to this issue. Only this time, Republicans are running the show.
Meet the new boss, same as the old boss?
It is not clear whether everyone is yelling “NOT IT” on purpose. Hanlon’s razor suggests otherwise. But who knows? Almost everybody is theoretically in favor of this reform, yet, so far, yet there has not been the political will to coalesce around one bill.
This makes sense. Why would Congress want to regulate itself? Why would members of Congress want to remove benefits they currently have? They would only do so if they perceived they had to. And let’s be honest: They don’t.
For political leaders like McCarthy, the calculation then becomes one of weighing preference (of the public and congressional reformers) versus intensity (some members intensely enjoy getting rich off of the stock market). The public prefers reform, but not enough to vote against their guy or gal in Congress.
As such, there is a risk this will become a feel-good issue—like term limits or refusing to pay Congress unless they pass a balanced budget—that amounts to little more than cheap sloganeering.
So how could this change?
With all due respect to Democrats like Reps. Craig and Spanberger, they don’t really matter to McCarthy, who only has one real priority: remaining the Speaker of the House.
What really matters in the short term is whether a few Republican politicians—such as Rep. Matt Gaetz (R-FL) (who supports banning stock trading)—makes this a priority for McCarthy.
Just as it took AOC to light a fire under Pelosi, only Republicans can influence McCarthy’s priorities.
Unless or until that happens, reform will remain merely a popular idea to champion.