- Biden did not call for a congressional stock trading ban during his State of the Union address.
- The issue is becoming more heated on the Hill and has broad bipartisan support from voters.
- A US House panel plans to meet next week to debate such a ban, Insider reported.
President Joe Biden had a packed agenda Tuesday night: Russia’s invasion of Ukraine, COVID-19 recovery, inflation, public safety in American cities.
But his State of the Union Address Tuesday omitted any mention of his position on whether members of Congress should be allowed to trade stocks, even though the issue is heating up on Capitol Hill and has significant support among voters.
The omission of a stock trading ban may have been a last-minute change; the Washington Post reported that an earlier draft of his speech called for a restriction on stock trading. The White House didn’t immediately respond to Insider’s questions about whether Biden had planned to call for restrictions on stock trading in Congress.
The closest Biden got on government reform was name-checking a separate, and all-but-dead-in-the-water ethics measure: the DISCLOSE Act, which aims to shed light on secret “dark money” in elections.
By saying nothing on the issue in his speech, Biden is continuing to defer to Congress on whether to pass new laws concerning the private investments of public officials. His silence on the issue also creates a political opening for House Republicans who are planning to make a stock trading ban one of their signature promises as they work toward winning back the House in the 2022 election.
A decade ago, Biden’s former boss, President Barack Obama, called for Congress to send the Stop Trading on Congressional Knowledge Act to his desk.
“Send me a bill that bans insider trading by members of Congress; I will sign it tomorrow. Let’s limit any elected official from owning stocks in industries they impact,” Obama said in his State of the Union address from January 2012.
Obama later that year signed the STOCK Act into law. It clarified that it was illegal for members of Congress to engage in insider trading. It also set rules saying that lawmakers must quickly disclose stock trades they make themselves or that their spouses and dependent children make.
But there has been renewed attention on the STOCK Act’s loopholes and shortcomings after Insider in December published its “Conflicted Congress” project. The five-month investigation found that a least 1 in 10 lawmakers and 182 senior congressional staffers had failed to comply with the reporting requirements of the STOCK Act.
It also identified numerous conflicts-of-interest issues. Dozens of lawmakers’ personal stock trades are discordant with their public responsibilities, such as members who craft anti-tobacco policy but invest in tobacco giants and others who receive plaudits from environmental groups for crafting policy aimed at combating the climate crisis — yet invest in fossil fuel companies.
At least 15 lawmakers who serve on either the House or Senate armed services committees have invested in the stocks of defense and weapons systems companies, who together spend tens of millions of dollars each year to lobby the federal government and pursue billions of dollars in government contracts.
On Tuesday, Insider also reported that four members of Congress or their spouses have either currently or recently invested money in Russian companies at a time when Russia has invaded Ukraine.
Insider’s report has brought about a fresh round of questions over whether members of Congress should be allowed to trade individual stocks at all. A ban has the backing by most Democratic and Republican voters, according to several recent polls, and has energized members of Congress to campaign on the issue.
Biden’s speech featured a “unity agenda” that focused on opportunities for Democrats and Republicans to work together — to tackle the opioid epidemic, address mental health disorders, help veterans, and reduce cancer deaths.
Two bills, the Ban Conflicted Trading Act and the TRUST in Congress Act, have bipartisan support. They would prevent members of Congress from trading stocks while in office either by forcing them to hold existing investments for the duration of their terms or by putting their assets into a blind trust. The main difference between the two bill is that the TRUST in Congress Act extends to spouses. Several other bills are also in the mix.
The House Committee on Administration plans to hold a hearing on a stock trading ban next week.