Top House Democrats have offered a proposal for stopping congressional stock trading, but it’s drawing criticism for including a ban on trading for Supreme Court justices, as that provision could serve as a poison pill.
The proposal — disclosed in a letter to colleagues last week by Democratic Rep. Zoe Lofgren of California, who chairs the House Administration Committee — comes in the wake of a bipartisan push to end congressional buying and selling of individual stocks.
From MarketWatch’s archives (May 2022): It’s crunch time for the push to ban Congress from trading stocks
Walter Shaub, senior ethics fellow at the Project on Government Oversight, a watchdog organization, has criticized the proposal in a series of tweets, accusing Lofgren and House Speaker Nancy Pelosi of including the Supreme Court justices in the plan because they know Senate Republicans will then kill it.
Lofgren and Pelosi have “blocked bills with bipartisan support,” said Shaub, who served as director of the U.S. Office of Government Ethics from January 2013 to July 2017. “They cut out all Dems who support a stock ban, all Republicans and all experts who could’ve helped draft a bill that works. They’ve included poison pills designed to kill the bill in the Senate,” he said.
A spokesperson for the House Administration Committee didn’t immediately respond to a request for comment.
In legislating, a poison pill refers to a provision that undermines the original purpose of an effort. The term also is regularly used during hostile corporate takeovers, when target companies try to make themselves unattractive to unwelcome bidders.
Even if the House passes some type of ban, the Senate isn’t expected to act on the issue before November’s midterm elections. Any legislation would need the Senate’s OK before President Joe Biden could sign it into law.
A MarketWatch report in January revealed how Congress resembled a Wall Street trading desk in 2021, with lawmakers and their family members making an estimated total of $355 million in stock trades as the market
soared during that year.
A range of Democrats and Republicans in the House and Senate have introduced bills aimed at ending congressional stock trading in an effort to limit conflicts of interests and boost trust in the government.