House stock trading bill passes with Trump exemption

The House stock trading bill passed Wednesday on a 232-198 vote, moving forward a long-running ethics proposal aimed at limiting how lawmakers invest while in office, Fortune reported. The measure would bar members of Congress from buying individual stocks, but its path is uncertain in the Senate after Republicans added a presidential exemption and a voter identification requirement.

Some Democrats joined the Republican majority to pass the bill as lawmakers prepared to return home to campaign before the midterm elections, according to Fortune. Republicans cast the vote as action on an issue that has fed public distrust of Washington, while many Democrats said the bill had been weakened by provisions they opposed.

Rep. Joe Morelle, a New York Democrat, called the measure “a sham” on the House floor and said the voter identification language was a “poison pill” meant to derail it. Rep. Bryan Steil, the Wisconsin Republican who sponsored the bill, described it as “transformational.”

What is in the House stock trading bill?

The bill, called the Stop Insider Trading Act, would prohibit lawmakers, their spouses and dependent children from buying individual stocks while the lawmaker is in office, Fortune reported. It would allow them to keep stocks they already own, but would require at least seven days of public notice before they sell.

The measure would exempt some investments, including stakes in widely held investment funds and certain assets held in trusts. It would not apply to the president or vice president.

President Donald Trump disclosed in May that he made more than 3,600 buy and sell orders during the first quarter of the year, Fortune reported. Many of those trades involved companies whose profits have been directly affected by decisions Trump made as head of the government, according to the report.

Critics said the legislation does not amount to a full stock trading ban because lawmakers could keep existing holdings and sell them after giving notice. The Campaign Legal Center urged Congress to reject the bill, saying it “fails to address the two inherent problems with congressional stock ownership: the appearance of insider trading and members’ ability to profit from their official position.”

Why did Democrats oppose the bill?

Bipartisan support weakened after Republicans attached a photo ID voting requirement drawn from the SAVE Act, an election measure backed by Trump that has repeatedly stalled in the Senate, Fortune reported. Democrats objected to adding the voting measure to an ethics bill focused on congressional investments.

Rep. Thomas Massie of Kentucky, a Republican who lost a primary earlier this year to a Trump-backed candidate, also criticized the move. In a social media post quoted by Fortune, Massie said Republicans added voter ID language to prompt Democrats to vote against the stock trading ban so the issue could be used in the November election.

Rep. Chip Roy, a Texas Republican, said he would have preferred legislation that required divestiture but called the bill “a giant step forward.” Supporters described the vote as the most significant House action yet on restricting stock trading by members of Congress.

Congressional stock trading has become a recurring campaign issue, with candidates in both parties calling for tougher restrictions, Fortune reported. Lawmakers have faced ethics scrutiny and, in some cases, criminal investigations over trades that critics said may have benefited from nonpublic information gained through official duties.

The issue gained momentum last year after Rep. Anna Paulina Luna, a Florida Republican, launched a discharge petition to force a vote on a congressional stock trading ban without relying on House Republican leaders, according to Fortune.

This story draws on original reporting from Fortune.