The push to bar members of Congress from trading individual stocks is heading toward a moment of truth this fall, as a slew of bills and mounting public pressure appears likely to force lawmakers to confront a question they have long tried to avoid: should elected officials, who often learn of market-moving information before the public, be allowed to directly participate in those markets?
The issue has simmered for years with little action, flaring during the pandemic when lawmakers were accused of profiting off early information about the coronavirus, and again this summer after multiple lawmakers filed stock disclosures months late. For critics, the pattern has laid bare the limits of the 2012 STOCK Act, which requires trades to be reported within weeks but imposes penalties so light that they are often shrugged off.
But this fall could present a make-or-break moment. In the Senate, a bipartisan bill from Senators Josh Hawley, a Missouri Republican, and Gary Peters, a Michigan Democrat, that would prohibit lawmakers and their families from trading individual stocks has already cleared the Senate’s Homeland Security and Governmental Affairs Committee. In the House, Reps. Chip Roy, a Texas Republican, and Seth Magaziner, a Rhode Island Democrat, are pressing for a vote on a separate bill that would require members of Congress and their families to divest altogether or place their assets in a blind trust, in which an independent manager controls all investments.
The House bill currently has 93 co-sponsors—77 Democrats and 17 Republicans—the most of any Congressional stock trading bill introduced in either chamber. Congressional watchers suspect there may be enough votes in both chambers to send a ban on members of Congress trading stocks to President Donald Trump, who has expressed interest in signing one. But the path forward is murky, with leaders wary of internal resistance and political risks. Florida Republican Rep. Anna Paulina Luna told TIME that she’s threatening to bypass leadership altogether and force a vote on Roy’s bill with a discharge petition if it isn’t brought to a floor vote through regular order.
House Speaker Mike Johnson has expressed support for a ban but has avoided weighing in on specific bills. “If there’s a ground of solid support, I’ll put it on the floor,” Johnson told TIME in July, while adding he sympathizes with concerns that such a ban would further narrow the pool of future members of Congress. “To say, not only can you not make outside income, you also cannot have any trade with the stock market, is a big deterrent for qualified candidates to run for Congress,” he said. Last week, Johnson’s office declined to comment on bringing any specific legislation to the House floor.
If any ban moves forward, lawmakers will face one of the most politically resonant votes of the year—a measure that cuts across party lines, touches on the most basic questions of public trust, and could restrict the financial freedom of the very people tasked with guarding that trust. If the effort once again stalls, reform advocates say, Congress risks squandering what may be its best chance in a decade to act. “There’s been pretty substantial progress,” says Donald Sherman, executive director of Citizens for Responsibility and Ethics, a nonpartisan watchdog group. “It’s long past time for this issue to be addressed.”
Little Room to Maneuver
For congressional leaders, the pressure is intensifying from both inside and outside the Capitol. A 2023 survey by the University of Maryland’s School of Public Policy found that 86% of Americans back a ban on stock trading for members of Congress and their families. Recent investigations have found lawmakers trading in companies directly related to their work on congressional committees. Several online dashboards track how much members of Congress and their families are profiting off stock trading based on the disclosure forms they are required to file, many of which were submitted months late.
A group of lawmakers are now threatening to force the issue as Congress returns from its August recess. “I’m hoping that he does the right thing,” Luna tells TIME of Speaker Johnson. “It can be done the easy way or the hard way. Either I do the discharge petition and I get the signatures to bring this vote to the floor or leadership can do this the normal way and do the right thing.”
That kind of blunt pressure has left Johnson with little room to maneuver on a topic that is seen as far more nuanced within the Capitol than the rest of the country. Johnson said Congress has many “faithful public servants” who have “great misgivings” about a congressional stock ban. “I don’t know how it would fare in committee, whether it could go through the whole process and make it to the floor,” he said. “But I’m not stopping it, because I understand where people are coming from.”
Johnson added that members have raised concerns with him about whether a blanket prohibition could unfairly penalize lawmakers with long careers outside of politics or deter many professionals with valuable perspectives from ever seeking office in the first place. “You can’t make outside income,” Johnson said. “So it becomes a deterrent for more and more highly qualified people to serve, because people who can make a lot and bring a lot to the table are unwilling to make the financial sacrifice.”
Some have suggested that the answer lies not in tightening ethics rules but in raising congressional pay. Rank-and-file members make $174,000 a year, a salary that has been frozen since 2009. But the idea of raising congressional salaries is politically fraught, and critics argue it misses the point. “Public service is a choice,” Sherman says. “And people make that choice along with their families, and it requires a certain level of sacrifice.”
The urgency comes as more lawmakers were revealed in recent weeks to be flouting existing disclosure rules. Rep. Lisa McClain of Michigan, the fourth-ranking House Republican, was late in reporting more than 500 trades worth at least $1.5 million. And Republican Sen. Markwayne Mullin of Oklahoma reported millions in trades more than a year after they occurred.
What’s in the proposed bans
Under the 2012 STOCK Act, lawmakers must disclose trades within 30 to 45 days, but violations typically carry a fine of just $200—or $500 in some cases—and are often waived. Critics argue the rules have proven ineffective.
The different bans proposed in Congress largely differ in the kinds of investments restricted, and which office holders and family members would fall under the ban. The Hawley-Peters Senate bill, branded the HONEST Act, would prohibit lawmakers, their spouses, and dependents from owning or trading individual stocks, with a 180-day deadline to sell off any holdings. Lawmakers would be allowed to invest only in diversified mutual funds, exchange-traded funds, or U.S. Treasury bonds while in office. The bill goes further than most other proposals by barring the use of blind trusts, which Hawley argues are “often workarounds” and too loosely policed by ethics committees. The bill would also apply to the next president and vice president, though not to the current officeholders.
Former House Speaker Nancy Pelosi, whose husband Paul Pelosi has made substantial profits on individual stocks over the years, has voiced support for the legislation.
By contrast, the TRUST in Congress Act, introduced in the House by Magaziner and Roy, would force members and their spouses and children to either divest their assets or move them into qualified blind trusts for the duration of their time in office. That approach relies on independent managers to wall off lawmakers from their investments, something Hawley and his allies argue doesn’t go far enough. (Unlike the Senate bill, the TRUST Act would not apply to presidents or vice presidents.)
Debate earlier this summer over the Hawley-Peters bill in the Senate committee underscored those divisions. “I practice what I preach. I don’t have individual stocks, I don’t trade in stocks. I’m not a billionaire, unlike others on this committee,” Hawley said during a July committee hearing. Florida Sen. Rick Scott, a Republican, slammed Hawley for making an issue of the wealth of his colleagues. “Anybody want to be poor? I don’t.” Scott said. “Right? So this idea that we’re going to attack people because they make money is wrong.”
New Jersey Sen. Andy Kim, a Democrat, countered that if investing in mutual funds isn’t sufficient for members of Congress, “then maybe this is not the right job for you.”
Even so, Senate Majority Leader John Thune told CNN in July he was doubtful that leadership would bring the bill to the floor for a full vote, noting that Hawley was the only Republican in committee to support it. Thune, a South Dakota Republican, did not return a request for comment for this story, but his earlier remarks underscore the obstacles a ban faces even after reaching the milestone of committee passage.
Trump’s position on a stock trading ban has been complex. He told TIME in April that he would sign a ban on congressional stock trading if it came to his desk. But in the weeks and months that followed, he publicly criticized some aspects of the effort, particularly a provision in the Hawley-Peters bill that would ban future presidents and vice presidents from insider trading, which Trump had thought would include him.
“The President supports the idea of ensuring that members of Congress and United States senators who are here for public service cannot enrich themselves,” White House Press Secretary Karoline Leavitt said in a July statement.
For all the momentum, Sherman says the real test will come when lawmakers have to cast a vote on a ban. “Everybody has words to say when they get asked,” he said. “I don’t really care what people think. I care how they vote…. It’s been far too long, too many scandals across parties, across leadership, across administrations, for me to put any stock whatsoever in what members say. They’re either going to pass something, or they’re not.”
—With reporting by Eric Cortellessa
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