Democrats are struggling to unite on stock trading ban details as the window for reform narrows

• Democrats in both chambers are attempting to consolidate their various stock trading ban proposals.
• But while key questions about the bill have been largely worked out, obstacles remain.

Democrats in Congress are slowly coalescing around a single bill that would ban federal lawmakers from trading stocks.

"There is consensus around the basic, fundamental principle that members of Congress shouldn't be serving their stock portfolios, they should be serving the people," said Democratic Rep. Joe Neguse of Colorado at a press conference Thursday following a Committee on House Administration hearing on congressional stock trading. "I think we'll have robust debate on the finer points."

Seven of the main Democratic co-sponsors of the various proposals to ban lawmakers from trading stocks shared a stage for the first time Thursday, with members from the progressive left to the moderate middle largely echoing each other's points.

"I mean, we're all here for the same purpose," Democratic Rep. Alexandria Ocasio-Cortez of New York said. "Rep. [Abigail] Spanberger said it so well, that this isn't just about actual impropriety, but this is about the perception of impropriety."

House Administration Committee Chairwoman Zoe Lofgren, a Democrat of California, told Insider that her committee is "engaged in an honest inquiry to find out what are the various issues and how they can be resolved."

But when asked the timing on when she thinks Democrats will come to a consensus on what kind of stock ban measure should be put to a vote on the House floor she responded, "I can't say."

Nor would Neguse.

"I can't speak for House leadership," he said when asked whether House Speaker Nancy Pelosi, who initially opposed stock-ban legislation, is supportive of her Democratic colleagues' efforts. "I would just simply say that when you have folks like Rep. Spanberger, and Chair [Pramila] Jayapal, Rep. [Andy] Kim, and Rep. [Angie] Craig all on the same team pushing forward on an issue of this substance, I'd bet that we're gonna get this done."

Sen. Jeff Merkley, a Democrat of Oregon, said on Thursday that his Democratic Senate colleagues were on board with the core goal of the legislation.

"On the Democratic side of the aisle, the principle of ending conflicted stock trading is essentially unanimous," he said, adding that there were still some issues to iron out, including when the new rules would take effect, exactly how blind trusts would be implemented, and how spouses would be affected."

Numerous STOCK Act violations

The Committee on House Administration hearing on stock trading represented a big step in lawmakers efforts to pass measures to restrict lawmakers trading individual stocks.

It followed publication of Insider's "Conflicted Congress" investigation in December, which found that 59 lawmakers and at least 182 senior-level congressional staffers have violated the Stop Trading on Congressional Knowledge (STOCK) Act of 2012 by failing to disclose their stock transactions within a timely manner. "Conflicted Congress" found numerous examples of conflicts of interest among federal lawmakers, both Democrats and Republicans.

But the hearing also revealed that significant obstacles remain.

For example, will Democrats and Republicans work together in a bipartisan fashion, as some on both sides hope?

Will the legislation itself seek to ban lawmakers alone from trading stocks — or extend to immediate family members?

Will a bill include Pelosi's demand that the judicial branch be included in reforms?

Will stock-ban legislation find itself in election year competition with other bills for scarce floor time in both the House and Senate?

The final measure that Democrats introduce on stock trading could indeed get some Republican votes. Already, several of the proposed bills have garnered co-sponsorships from lawmakers such as Sen. Lindsey Graham of South Carolina, Sen. Marsha Blackburn of Tennessee, and Rep. Matt Gaetz of Florida.

Rep. Chip Roy, a Republican of Texas, released a joint statement Thursday with Spanberger, a Democrat, that touted their bipartisan bill, the TRUST in Congress Act, and in part lauded the Committee on House Administration's hearing.

"Today's hearing shows that pressure and public opinion can indeed force a reckoning with Washington's status quo," Roy and Spanberger wrote. "We are encouraged by this step."

Stock-ban skepticism

Nevertheless, Thursday's hearing and press conference made clear that significant objections from the right remain.

"If we enact something like this, it will strip the rights and the freedoms of individuals, and everybody on this committee is a free American citizen that has rights," Rep. Barry Loudermilk, a Republican of Georgia, said at the committee hearing on stock trading.

The Committee on House Administration's ranking Republican, Rep. Rodney Davis of Illinois, expressed skepticism about an outright congressional stock ban and said he's more inclined to back stronger disclosure rules and enhanced enforcement of current laws.

Doug Andres, a spokesman for Senate Minority Leader Mitch McConnell declined to comment. In February, McConnell said: "We'll take a look at that kind of legislation and see what may be appropriate."

Notably, House Republican Leader, Kevin McCarthy, had championed the notion of banning stock trading in Congress early this year. Republicans have also used the issue of stock trading as a political weapon against some House Democrats who've run afoul of the STOCK Act. But McCarthy has been conspicuously quiet about stocks in recent weeks, and his office didn't reply to a request for comment.

Working toward an endgame

The bill Merkley originally introduced would not ban spouses from trading stocks.

But Insider learned Thursday that Democratic Reps. Raja Krishnamoorthi of Illinois, as well as Ocasio-Cortez and Neguse, introduced an amendment to their own bill, the House companion of Merkley's legislation, that would broaden the legislation to include spouses and dependents.

It would also institute new restrictions on the implementation of blind trusts. Martina McLennan, a spokesperson for Merkley, told Insider that the senator was generally supportive of the proposal.

In a letter to Lofgren outlining the changes, the trio of House Democrats urged the House Committee on Administration to "move without delay to mark up the Ban Conflicted Trading Act with the attached changes."

"I think it's great," said Spanberger, the Democratic co-lead of the TRUST in Congress Act, when Insider asked her about the amendment.

Her bill, co-sponsored with Roy, included a ban on spouses from the beginning. "It's helpful that they're just affirming that, you know, spouses are part of the discussion," said Spanberger, who attended Thursday's hearing as an audience member.

—bryan metzger (@metzgov) April 7, 2022

But she and Roy also called for their TRUST in Congress Act to serve as the basis for further stock ban negotiations, adding that the hearing would "ultimately prove to be a meaningless delay tactic if not accompanied by action."

That could portend an ongoing tug-of-war among Democrats over whose bill gets to be the main vehicle for reform or what specific reforms are included.

Even Lofgren, the top Democrat at Thursday's hearing, at times expressed doubts about a full-blown congressional stock trading ban.

At one point, Lofgren suggested focusing on harsher penalties for people who violate existing law and offering better compliance training for freshmen members of Congress.

She also sarcastically asked witnesses why members' stocks should have to be treated differently from other assets, including their homes.

She noted that her husband has a retirement account — it includes many individual corporate stocks, according to congressional disclosure records — managed "by some guy at a bank."

And she questioned why members might have to either dump their stocks or create a blind trust rather than set up a similar arrangement as her husband.

Additionally, upon reversing her prior opposition to a stock trading ban, Pelosi has insisted that the judiciary must be included in any reforms.

"I say, when we go forward with anything, let's take the Supreme Court with us," she told reporters in January.

That demand has been met with some skepticism from Democrats. Ocasio-Cortez told Insider on Thursday that while the idea made sense on principle, it was more important to address the issue as it applies to Congress.

"Do I think that the judiciary should have similar restrictions? Yes," said Ocasio-Cortez. "Do I think the inclusion of the judiciary is make or break in passing [the bill]? No."

Politics won't be the only factor to slow consensus on the issue of congressional stock trading. Despite Capitol Hill's attempts to return to normal — following polling showing that's what voters prefer — several of its members have gotten COVID-19.

The most recent is Pelosi herself, who tested positive on Thursday. The diagnosis led to Pelosi canceling a planned weekly press conference, so she was not available to answer questions after the House hearing about whether she would support any specific STOCK Act reforms.

Thursday's stock hearing itself was originally scheduled for March 16, then delayed after Lofgren got COVID-19.

All the delays bring Congress to a moment ever-closer to Election Day, when it becomes more difficult to reach bipartisan consensus on most any topic as each side leverages their preferred policy narratives that they think will best motivate voters.

"Let's not lose this opportunity," Merkley said. "Time is running out. Campaign season is upon us."