In a move that has reignited a long-standing debate over ethics in Washington, House Speaker Mike Johnson announced this week that a congressional committee would advance legislation imposing new restrictions on stock ownership and trading by members of Congress. The proposal, however, falls short of the outright ban many populist lawmakers and advocacy groups have demanded for years.
A Step Forward or a Political Sham?
Speaker Johnson, a Republican from Louisiana, framed the Stop Insider Trading Act as a crucial step to restore public faith in the legislative body. "Republicans are going to take an important step in our efforts to restore the people’s faith in Congress," Johnson stated at a Tuesday press conference. "Obviously, members of Congress should not be allowed to profit from insider trading."
The bill, which was advanced by the House Administration Committee on a party-line vote, specifically targets the practice of lawmakers using privileged, non-public information to profit from stock trades. It would ban the purchase of individual stocks and require lawmakers to give advance public notice before selling any holdings, while also increasing penalties for non-compliance.
However, the legislation does not prohibit members from owning stocks outright, nor does it ban all trading. This key distinction has drawn sharp criticism from ethics watchdogs. Kedric Payne, vice president and general counsel at the nonpartisan Campaign Legal Center, was blunt in his assessment, telling HuffPost, "This is a sham bill to try to confuse people about what the problem is."
Democratic Skepticism and an Alternative Proposal
The bill has so far garnered little Democratic support. Representative Alexandria Ocasio-Cortez, a Democrat from New York, initially slammed it as a "fake" ban. While she later indicated she was engaging in conversations about it, she reiterated her core concern: "I don’t believe that members of Congress should own stock. I have concerns that this continues to allow that."
Democrats on the committee, led by Representative Joe Morelle of New York, criticized a provision that allows lawmakers to use stock dividends to purchase more shares. "Under this bill, the wealthiest members of Congress can keep every single share of stock they currently own and use their dividends to buy even more stock," Morelle argued.
Before this week's development, momentum had been building around a different, more stringent proposal: the bipartisan Restore Trust in Congress Act. Sponsored by Representatives Chip Roy, a Republican from Texas, and Seth Magaziner, a Democrat from Rhode Island, that bill would ban lawmakers from owning individual stocks altogether. It has attracted 100 Democratic and 30 Republican co-sponsors.
The Core Conflict: Investments vs. Constituents
Ethics experts argue that the fundamental issue extends beyond just insider trading. Payne of the Campaign Legal Center identified two critical problems: lawmakers profiting from trades and the potential for them to make legislative decisions based on how those decisions might affect their personal portfolios.
"The public doesn’t know if decisions made by members of Congress are intended to protect their constituents or protect their investments," Payne explained. He concluded that the newly advanced legislation "doesn’t fully get rid of the problem of conflict of interest with stocks in Congress."
Even some strong proponents of a full ban, like Republican Representative Anna Paulina Luna of Florida, have backed the current bill as a step forward. Representative Bryan Steil, the Wisconsin Republican who chairs the House Administration Committee, acknowledged the compromise, stating, "Perfection is far too often the enemy of the good in this town."
The measure could face a full House vote in the coming weeks. If it passes, it is expected to meet significant resistance in the Senate, where interest in restricting stock trading has historically been muted. The debate underscores the ongoing challenge of legislating ethics reforms in a body directly affected by the rules.
