It’s not every day that we see a common ground between President Donald Trump and former House Speaker Nancy Pelosi, but they both seem to agree on a Congressional bill aimed at preventing members of Congress and their families from trading stocks. This legislation, which passed a jurisdiction committee in late July, has garnered significant bipartisan support, aiming to tackle public corruption and rebuild trust in Congress.
Intuitively, it makes sense that Congress members shouldn’t engage in stock trading while in office. A 2023 University of Maryland survey found that 86% of participants favored a trading ban for Congress, with both Republicans and Democrats showing nearly equal support.
In August, Treasury Secretary Scott Bescent emphasized the stakes involved when lawmakers trade stocks, mentioning “eyeworthy returns” that some have achieved, which would leave hedge funds envious. This isn’t just about ethics, but also about the integrity of our financial system. Trust, transparency, and fairness are essential to the market, and when members of Congress leverage insider information against unprivileged investors, it really can undermine public confidence in both government and the economy.
There’s a coalition of unlikely supporters backing this ban beyond Trump and Pelosi. Figures like Senators Alexandria Ocasio-Cortez and Ron Wyden, alongside conservatives like Senators Chip Roy and Josh Hawley, are on board. Even House Speaker Mike Johnson and minority leader Hakeem Jeffries are in agreement about this measure.
Pelosi’s support for the bill is especially significant given her family’s history with stock trading. For instance, her husband, Paul, made waves last year after selling visa stocks worth $500,000 to $1 million shortly before the Justice Department launched an antitrust lawsuit against the company. Such timing raised eyebrows and sparked speculation about potential influences from her position or connections within the Biden administration.
With legal proceedings unfolding, the question of Congress members trading stocks is still a hot topic. Last year alone, 120 members engaged in over 9,400 transactions, according to Capitol Trades, a platform tracking such actions. Some members seemed to perform so well it wouldn’t be surprising if they were on Wall Street instead. Data from another platform showed that several of them achieved returns exceeding 70%, while the S&P 500 managed only 25% that year.
This year appears to be shaping up for even more activity; almost 9,200 transactions were recorded by August 19, totaling over $395 million.
So, does this trading impact public policy? It’s difficult to say for sure. A few years back, the New York Times examined Congressional transactions from 2019 to 2021 and noted some dubious instances. One notable case involved a California lawmaker whose wife sold Boeing stock just before a committee report criticized the company related to fatal 737 Max crashes.
Though Congress members rarely face legal repercussions for trading activities, it has happened. In 2019, Congressman Chris Collins from New York resigned after pleading guilty to insider trading charges and lying to federal agents. He served time but was later pardoned by Trump.
Concerns about Congressional stock trading only foster distrust in the government. A Pew survey last year found that merely 2% of Americans believed the federal government would do the right thing “always,” and only 21% felt that way “most of the time.” Such skepticism is detrimental to the nation’s democracy, regardless of political affiliation, complicating the pursuit of any agenda.
Implementing a ban on stock trading for Congress could be a step toward restoring faith in the federal government. It offers an opportunity for bipartisan cooperation on initiatives that genuinely benefit the nation, though such changes likely won’t happen overnight.
