Should Members Of Congress Be Allowed To Trade Stocks?

HONEST Act

While the congressional stock trading question has played out on Capitol Hill for years, the debate saw some renewed momentum this week. A bill sponsored by Senator Josh Hawley (R-MO) cleared the Senate Homeland Security and Government Affairs Committee by an 8-7 vote along party lines, with all Republicans voting against the measure except for Hawley. GOP members cited several different reasons for their disapproval, including rushed legislation, discouraging some from holding office, concessions to the executive branch, or just another way to target the White House.

Snapshot: Members of Congress have a lot of privileged and classified information that could move stock prices (think back to COVID pandemic), as well as financial incentives from companies that routinely lobby Congress. Those decisions could also play a role in how much a given stock is worth, and Congress sought to counteract that in 2012 by passing a bill known as the STOCK Act. While the legislation requires lawmakers to disclose trades within 45 days, many say it doesn’t do enough to prevent insider trading and conflicts of interest.

The new bill by Hawley is similar to the PELOSI Act he introduced in 2023, though that one didn’t make it out of committee. While President Trump initially expressed interest in the bill, his tone changed after the partisan divide, as well as Hawley’s vote against an amendment that would have investigated Nancy Pelosi’s past stock trades. Senate Majority Leader John Thune will now have to decide whether to bring the bill to a floor vote, but the chances of it moving forward are looking slim.

What’s in the bill: The new measure, called the HONEST Act, would ban members of Congress and their spouses from trading stocks while in office, requiring them to gradually divest their shares. It would also apply to the president and vice president, but that provision would only apply to an elected official’s next term (meaning after President Trump and JD Vance leave office). The bill would also seek to close other loopholes surrounding trades, as well as written certification requirements and compliance audits.