Senate Democrats block stock trading bill in 53-47 vote

The US Senate on 30 September blocked a Republican bill restricting stock trading by members of Congress, voting 53-47 against advancing the Stop Insider Trading Act — seven votes short of the 60 needed to open debate. Every Democrat and independent voted no. The bill had passed the House in July by 232-198, with 13 Democrats joining Republicans.theguardian.com+1

The vote leaves unresolved a question that has simmered for years: how far to go in restricting lawmakers' trading while they routinely handle sensitive information. The 2012 STOCK Act already makes insider trading illegal for lawmakers, but its disclosure requirements are easy to flout, whether intentionally or unintentionally. The failure comes five weeks before the 3 November midterms, and was among the Senate's last acts before it breaks for campaign season.upnorthlive.com

What the bill would have done

The bill, sponsored by Republican Senator Pete Ricketts of Nebraska, would bar members of Congress, their spouses and their dependent children from buying individual stocks. It would allow lawmakers to keep stocks they already own and continue to sell them, but would require public notice at least seven days and no more than 14 days in advance of a sale.

Violators could face fees imposed by the House and Senate Ethics panels of either $2,000 or 10 percent of the value of the transaction, whichever is greater, along with the net gain realized. An exception was included for widely held investment funds. Democrats said the bill fell short of a ban because lawmakers could keep everything they already own, reinvest dividends into more shares, and let a spouse or child trade on their behalf.

Senate Minority Leader Chuck Schumer called the bill "a permission slip for corruption" and said Republicans had designed it to fail. He also branded it "as ineffective as a screen door on a submarine." Democrats objected that the House had added unrelated language requiring Americans to show photo ID at the polls, which Schumer called a "poison pill" that would make voting more difficult.

Why Democrats voted no

Republicans said Democrats had chosen politics over reform. Majority Leader John Thune said Democrats "can't take yes for an answer" and were "trying to politicize everything going into the election." Ricketts, who faces a competitive re-election race, told the Senate floor: "Congress's approval rating is only 15%." Joe Gruters, chair of the Republican National Committee, accused Democrats of choosing to "protect the swamp" over voter ID and accountability.

A Common Cause analysis found members of both parties made 13,324 trades worth $635.6m last year. Capitol Markets reports members of Congress have disclosed 44,690 stock trades on the public record, including 9,139 filed so far this year, with about 25 percent of those trades made by a member sitting on a committee that oversees the relevant company's industry.

Where the numbers came from

Common Cause cited polling showing 86% of Americans want Congress to prohibit its members from trading stocks, including 88% of Democrats and 87% of Republicans. The same group found 202 representatives and 56 senators in the 119th Congress owned stock. Democrats also pointed to disclosures showing Trump made more than 14,000 stock trades in his first year back in office, worth up to $1.06bn.

A Senate committee advanced a bipartisan ban last year, led by Senator Josh Hawley of Missouri, that would ban both trading and ownership of stocks by lawmakers, the president and vice president and their families. That measure has yet to see action on the Senate floor. In June, Senator Cynthia Lummis objected to a request by Senator Jon Ossoff that would have banned senators from trading stocks and cryptocurrency.

What comes next

The vote was among the Senate's last acts before it breaks for campaign season, leaving the debate over lawmakers' stock portfolios unresolved. Common Cause recommended attaching a stock-trading ban to a must-pass legislative package before year's end. The next scheduled electoral event is the 3 November midterms, which will decide which party controls Congress.