WASHINGTON — Speaker Nancy Pelosi said on Wednesday she would accept a ban on the ownership and trading of individual stocks by members of Congress, a potentially significant turning point after her initial opposition sparked support among politically vulnerable Democrats seeking ways to distance themselves from their leaders.
But in a complicating twist, she said she wants to apply all restrictions on stock trading, including existing share ownership and trading disclosure rules that now apply to members of Congress and the executive branch, to the judicial branch of government. especially the Supreme Court. Court of law.
“It should apply to the entire government,” she told reporters at her weekly press conference, adding: “The judiciary has no reporting. The Supreme Court has no announcements. It has no reporting of stock transactions and makes important decisions every day. .”
There are already several proposals for a trade ban in the House and Senate, including a new law unveiled this week by Senators Elizabeth Warren, Democrat of Massachusetts, and Steve Daines, Republican of Montana. The drive was sparked by a spate of revelations in 2020 that senators from both sides had traded health care shares after closed-door briefings about the then-nascent coronavirus pandemic.
It has gained momentum in recent weeks as Democrats from conservative-oriented districts eager to demonstrate their independence from Ms. Pelosi and other party leaders took up the issue as a way to appeal to growing populist sentiment among their leaders. voters.
They saw the power of the issue in the 2020 election, when it saw the victories of two Georgian Democrats, Jon Ossoff and Raphael Warnock, berating their incumbent Republican rivals for their stock trading.
New York Senator Chuck Schumer, the Senate majority leader, took to the Senate floor on Wednesday to urge Democrats to reach out to Republicans and agree on a single trade bill that could be overwhelmingly passed.
“I believe this is an important issue for Congress to address, and it is something that has clearly sparked interest on both sides of the aisle in recent weeks,” said Mr. Schumer.
But Mrs. Pelosi’s embrace was hardly uniform. She said she has instructed the House Administration Committee, which has jurisdiction over the chamber’s operations, to draft new stock trading legislation. She said she assumes “they’ll have it pretty soon.”
She also called for tougher penalties for lawmakers who violate existing rules about reporting share ownership and trading under a 2012 law called the Stop Trading on Congressional Knowledge (STOCK) Act.
“What we’re trying to build is consensus,” she said.
It can be difficult to conclude such an agreement. Existing bills differ on whether spouses and family members should also be prohibited from owning and trading individual stocks, whether capital gains taxes on forced stock sales should be deferred, and whether the prohibition should apply to other assets, such as businesses.
And some Democratic leaders have raised questions about a slippery slope. Insider trading is already illegal, and the STOCK Act prohibits members of Congress from trading “nonpublic information derived from” their position. That law also requires disclosure of most stock transactions, although Ms. Pelosi noted that it was not an effective deterrent.
If Congress goes further and completely excludes individual stock ownership, critics argue, what about real estate ownership? Should a legislator be allowed to factor student loans into loan forgiveness legislation?
But for proponents of banning stock ownership in either party, the need is “pretty simple,” as Texas Republican Rep. Chip Roy put it.
“The idea that we come in and buy, sell, buy, dial in, it’s a two-pronged problem,” said Mr. Roy, who in 2020, along with Virginia Democrat Abigail Spanberger, wrote legislation that went nowhere. †
The sophisticated and lucrative trade of Mrs. Pelosi’s wealthy husband, Paul Pelosi, has also attracted attention, especially from Republicans
Ms. Spanberger admitted that some of her colleagues have suggested that a stock ownership ban could deter capable people from running for Congress. But she showed little compassion.
“There are many jobs and millions of Americans out there,” she said. “If this is too much of a restriction, you just showed what your priorities are, and you shouldn’t be in Congress.”