The speaker had resisted a ban, which has been championed by lawmakers in competitive re-election races. Now she says she would be open to it if it included the judicial branch.
Feb. 9, 2022Updated 12:14 p.m. ET
WASHINGTON — Speaker Nancy Pelosi on Wednesday said she would accept a ban on the ownership and trading of individual stocks by members of Congress, a potentially important turnaround after her initial opposition helped fuel support among politically vulnerable Democrats looking for ways to distance themselves from their leaders.
But in a complicating twist, she said she wanted any stock-trading limitations, including existing disclosure rules on stock ownership and trading that now apply to members of Congress and the executive branch, to also apply to the judicial branch of government, especially the Supreme Court.
“It has to be governmentwide,” she told reporters at her weekly news conference, adding, “the judiciary has no reporting. The Supreme Court has no disclosure. It has no reporting of stock transactions, and it makes important decisions every day.”
Multiple proposals for a trading ban already exist in the House and Senate, including a new bill unveiled this week by Senators Elizabeth Warren, Democrat of Massachusetts, and Steve Daines, Republican of Montana. The drive was touched off by a spate of revelations in 2020 that senators from both parties had traded health care stocks after closed-door briefings on the then-nascent coronavirus pandemic.
It has gathered momentum in recent weeks as Democrats from conservative-leaning districts, eager to demonstrate independence from Ms. Pelosi and other party leaders, have taken up the issue as a way of appealing to a growing populist sentiment among their constituents.
They saw the power of the issue in the 2020 elections, when it propelled the victories of two Georgia Democrats, Jon Ossoff and Raphael Warnock, who castigated their incumbent Republican rivals for their stock trades.
Senator Chuck Schumer of New York, the Senate majority leader, took to the Senate floor on Wednesday to push Democrats to reach out to Republicans and find agreement on a single stock-trading bill that could pass overwhelmingly.
“I believe this is an important issue that Congress should address, and it is something that has clearly raised interest on both sides of the aisle over the last few weeks,” Mr. Schumer said.
But Ms. Pelosi’s embrace was hardly unequivocal. She said she had tasked the House Administration Committee, which has jurisdiction over the chamber’s operations, to produce new stock-trading legislation. She said she assumed “they will have it pretty soon.”
She also called for stricter penalties on lawmakers who flout existing rules on reporting stock ownership and trading under a 2012 law called the Stop Trading on Congressional Knowledge (STOCK) Act.
“What we’re trying to build is consensus,” she said.
Striking such an agreement could prove tricky. Existing bills differ on whether spouses and family members should also be prohibited from owning and trading individual stocks, whether capital gains taxes on forced stock sales should be deferred, and whether the prohibition should apply to other assets like businesses.
And some Democratic leaders have raised questions about a slippery slope. Insider trading is already illegal, and the STOCK Act bars members of Congress from trading on any “nonpublic information derived from” their position. That law also mandates disclosure of most stock trades, although Ms. Pelosi noted that it had not been an effective deterrent.
If Congress is going to go further and bar individual stock ownership outright, critics argue, then what about real estate holdings? Should a lawmaker with student loans be allowed to weigh in on legislation on loan forgiveness?
But for proponents of a stock ownership ban in both parties, the imperative is “pretty simple,” as Representative Chip Roy, Republican of Texas, put it.
“The idea that we’re coming in and buying, selling, buying, calling in puts, it’s a bipartisan problem,” said Mr. Roy, who co-wrote legislation in 2020 with Representative Abigail Spanberger, Democrat of Virginia, that went nowhere.
The sophisticated and lucrative trades of Ms. Pelosi’s wealthy husband, Paul Pelosi, have also attracted attention, especially from Republicans.
Ms. Spanberger conceded that some of her colleagues have suggested that a ban on stock ownership could dissuade capable people from running for Congress. But she expressed little sympathy.
“There are a lot of jobs and millions of Americans out there,” she said. “If this is too much of a limitation, you’ve just demonstrated what your priorities are, and you shouldn’t be in Congress.”