A recent survey conducted by the Program for Public Consultation (PPC) at the University of Maryland indicates that an overwhelming bipartisan majority of Americans feel there should be a ban on stock trading for members of Congress, the President, Vice President, and Supreme Court.
Of course, Members of Congress trading stocks is nothing new. Still, the influx of lucrative purchases and sales of stocks among officials during various critical milestones in the COVID-19 pandemic brought this discussion back to the forefront for Americans. According to the Wall Street Journal, the trading activity of these officials was 60% higher in January 2020 than the comparable monthly average in 2019.
Given this information, the Program for Public Consultation conducted a survey to determine what Americans thought of the current stock trading legislation in America and whether or not it was time to make a change.
Stock Trade Legislation in America
Although no current federal legislation reflects a ban on stock trading, laws require Members of Congress to be transparent about their individual financial dealings.
A law requiring Members of Congress to disclose stock trades was passed in 2012 to give the public, ethics boards in Congress, and federal agencies the ability to determine whether there are potential conflicts of interest in their activities and for appropriate bodies to investigate any likely insider trading they may suspect.
This law may well have paved the way for the high number of allegations around the numerous well-timed trades made by officials at the beginning of the COVID-19 pandemic. This directive may be law, but it’s not the only stock trading piece of legislation in discussion. Currently, there are eight bills in the pipeline related to this topic that are looking for endorsement.
In 2022, the Senate introduced a series of bills related to the prohibition of stock trading, particularly in individual companies, amongst Members of Congress. The legislation includes S. 3494, S.1171, S. 439, H.R. 345, H.R. 1138, and H.R.2678. Further legislation was brought forward to impose a ban on the President, the Vice President, and the Supreme Court (S. 693 and H.R. 389).
Under any of these bills, Officials would retain the right to invest in mutual funds and other large portfolios. They could continue to own their existing stocks so long as congress members place them in an independently managed fund, also known as a blind trust. These bans would also apply to all family members that live with the Officials.
The research team at the PPC reached out to over 2,600 registered voters across the country to determine whether they feel these proposed bills are the right move for Congress.
Survey Says: No Trading for Congress
The PPC team conducted the survey following a briefing for all participants to ensure that everyone polled had a reasonable level of understanding of the current landscape and proposed legislation.
Of the 2,625 registered voters surveyed, an undeniable and overwhelming bipartisan majority of individuals are in favor of prohibiting Members of Congress from trading stock in individual companies. Following an evaluation of expert arguments for and against the proposed bills, a total of 86% of voters are for the prohibition of stock trading. Of those in agreement, 87% are Republicans, 88% are Democrats, and 81% are Independents.
Incremental improvements in approval percentage appear in similar survey questions pertaining to the President, Vice President, and Supreme Court Justices, with 87% overall in agreement, 87% being Republicans, 90% Democrats, and 82% Independents.
“While the prospect of a stock trading ban is controversial within Congress, public support approaches unanimity,” comments Steven Kull, director of PPC.
Survey participants are once again united in their opinions when assessing the proposal to ban stock trading for all federal employees. However, in this instance, the majority of participants are opposed to the legislation. Only 40% of those surveyed are in favor of the government-wide ban (proposed in bill H.R. 389), reflecting a spread of 42% Republicans, 37% Democrats, and 42% Independents.
A variety of arguments for and against the bans were assessed on their strength. Most popular among the “in favor” arguments is the idea that there are too many potential conflicts of interest when Members of Congress can hold and trade stocks in individual companies, which 92% of respondents find convincing.
Among the minority supported arguments against the ban, the most popular garners only 28% support overall. This argument is that this new law is unnecessary since there are already laws against insider trading that apply to Members of Congress.
Whether voting blue or red, one thing the public agrees on is a ban on stock trading for Members of Congress, the President, the Vice President, and Supreme Court Justices, no matter their political affiliation.
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