The Washington PostDemocracy Dies in Darkness

Opinion Congress could finally ban its members from trading stocks — and not a moment too soon

Then-Sen. Kelly Loeffler (R-Ga.) unloaded millions of dollars worth of stocks within days of a January 2020 briefing on the emerging coronavirus threat. (Jabin Botsford/The Washington Post)

One year into the bitterly divided 117th Congress, Democrats and Republicans in both chambers have shown rare signs of agreement on an overwhelmingly popular issue. And even more unusual: It’s a push to hold themselves accountable. Earlier this month, lawmakers from both parties in both the House and Senate introduced bills that would stop federal legislators (and, in some cases, their immediate family members) from trading individual stocks while in office.

The legislation comes not a moment too soon. More than 40 percent of members of Congress own individual stock shares, amounting to $225 million in assets. And one of the few things that Americans approve of less than Congress itself is the idea that its members can play the stock market. In one survey, just 5 percent of voters said they believe that members of Congress should be allowed to trade stocks.

It’s no surprise: In recent years, there have been highly publicized, troubling instances of lawmakers getting rich off trading. Like when then-Sen. Kelly Loeffler unloaded millions in stock within days of a January 2020 briefing on the coronavirus — and shortly thereafter, picked up between $100,000 and $250,000 in stock in a remote-work software company.

While the Stock Act was enacted in 2012 to prevent members of Congress from trading on insider knowledge or political connections, they are rarely penalized. The Justice Department dropped insider trading investigations into Loeffler and three other senators. The Senate Ethics Committee hasn’t sanctioned a single lawmaker in over 14 years. What’s more, as of earlier this month, at least 54 members of Congress have violated the Stock Act. The standard penalty for such violations the Stock Act is just $200 — little more than a corruption surcharge at trades of this scale. And we don’t even have public records about whether officials have paid these fees.

The Post's View: Members of Congress should not be allowed to trade individual stocks

So as it stands, government officials can still get rich off insider information. We’ve put the fox in charge of the chicken coop: We’re trusting our officials to be careful, non-biased regulators of the very industries that are making them rich.

Of course, any one legislator’s true motivations for a given political stance can’t be definitively proved. But the results speak for themselves. We’ve consistently failed to pass significant climate legislation — meanwhile, the senator standing in the way got $500,000 in coal stock dividends in 2020. The Senate is struggling to pass popular antitrust legislation aimed at Big Tech; as it happens, tech is the top individual stock category for congressional trading (72 members hold stock in Apple alone). This Congress hasn’t even begun to debate the wildly popular public health insurance option that President Biden proposed during the 2020 campaign. But are we surprised, when more than 50 members of Congress have $100,000 or more invested in the health-care and pharmaceutical industries?

Exhibit A for financial incentives that could cloud a representative’s reasoning: This very issue! One of the most prominent critics of banning congressional stock trading is Speaker Nancy Pelosi. The speaker has gained so much from trading in office (through her husband’s trades) that there’s an entire community on TikTok that bases investment strategies on copying her portfolio — calling her the “queen of investing.” In a country where the speaker of the House can also be the “queen of investing,” the phrase “checks and balances” means something else entirely.

Standing in the way of this legislation isn’t just bad governance, it’s bad politics. As Democrats face an uphill battle in the 2022 midterms, failing to act on an issue with bipartisan congressional support and near-universal public support would fuel the narrative that they are too corrupt or inept — or both — to get anything done.

Is there any reasonable argument to oppose this measure? Well, perhaps it could wind up disincentivizing people with significant stock portfolios from running for Congress. But already, many of our lawmakers are millionaires — and under their watch, corporations have thrived while working people and the planet suffer. Disincentivizing people who would mourn the loss of their stock trades from running for Congress — and allowing more working people to run in their stead — may be exactly what the country needs. As The Post’s editorial board noted last week, “If lawmakers want to play the market, they should select a different career path.”

Of course, a stock-trading ban won’t repair the public’s trust and get big money out of politics on its own. As of last week, it’s been 12 years since the disastrous Citizens United ruling — the effects of which won’t be undone until we end corporate personhood once and for all. The revolving door between Congress and lucrative lobbying positions needs to be slammed shut.

But ending a thousand conflicts of interest can begin with a single step: insisting that our representatives should divest from corporations and reinvest in the American people.