Democrats Vote Down Stock Trading Ban For Congress

Every Democrat in the Senate voted Wednesday to block legislation that would restrict congressional stock purchases and require photo ID to vote in federal elections, arguing the trading restrictions were inadequate and objecting to the voter ID provision.

The Stop Insider Trading Act, sponsored by Rep. Bryan Steil (R-WI) and led in the Senate by Sen. Pete Ricketts (R-NE), fell short in the chamber on a 53-47 procedural vote, just seven votes short of the 60 needed to advance. All Republicans supported advancing the measure, while Democrats and both independents opposed it. 

The legislation passed the House in July, 232-198. If signed into law, it would prohibit lawmakers, their spouses, and their dependent children from purchasing new individual publicly traded stocks, subject to exceptions, while allowing them to retain existing holdings.

The bill also requires public notice seven to fourteen days before selling covered investments. Violations would carry a penalty of $2,000 or 10% of the transaction’s value, whichever is higher, plus the applicable net gain. 

The proposal attempts to curb conflicts of interest without requiring lawmakers and their families to liquidate investments they already own. Critics argue that allowing them to retain and sell those holdings leaves the underlying problem unresolved.

The bill also permits dividend reinvestments and certain trades made by spouses or dependent children as part of their primary occupation for investments they do not personally own.

Senate Minority Leader Chuck Schumer (D-NY) voiced his criticism from the Senate floor on Wednesday.

“The Republican bill is a permission slip for corruption, not a stock trading ban,” said Schumer. “Only Senate Republicans would dare call a bill that permits members of Congress to continue to own, sell and buy stocks, a stock trading ban.” 

Chris Josephs, co-founder of the trading app Autopilot and the man behind the Nancy Pelosi Stock Tracker, pointed to the voter ID provision as another obstacle to passage.

Josephs called the addition a “kill pill,” arguing that it forced Democrats to vote on two contentious issues at once and showed that “neither side” was serious about passing a stock-trading ban.

Republican leaders defended the combination by arguing that both policies had broad public support.

On Wednesday, Senate Majority Leader John Thune (R-SD) said the legislation paired “two common sense measures – a stock purchase ban for members of Congress, and a voter ID measure.” In July, Speaker Mike Johnson called pairing them “a very logical thing to do.”

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