Before the August break, American legislators are expected to consider a ban on individual stock trading by members of Congress as supporters push for comprehensive legislation to address the problem.
It is anticipated that the Senate will soon release a compromise bill that incorporates parts of bills from various senators. Donald Sherman, senior vice president and chief counsel for the Citizens for Responsibility and Ethics in Washington said that the issue could become one that "members of Congress are either going to run on or run from in November."
According to a recent poll, around 63% of voters comprising 69% of Democrats and 58% of Republicans support the ban. However, it is not currently seen as an urgent issue with Americans focusing on other topics including inflation, Russia’s invasion of Ukraine, immigration, climate change, and election laws.
After news broke that some lawmakers had traded using insider information, bipartisan bills to prohibit individual stock trading by members of Congress gained traction. Chuck Schumer, the majority leader in the Senate stated that he hopes to vote on the bill this year.
Critics say that a ban would discourage people from running for office and that lawmakers should be able to invest in stocks as they have policy power over the equity market. It is expected that a Senate vote will take place in 2022, though some remain skeptical.
Liz Hempowicz, director of public policy at the Project on Government Oversight said that public sentiment is in favor of a ban and that it would help to ensure that lawmakers handle matters with the public interest at the forefront.
A ban in the opinion of Jennifer Schulp, director of financial regulation studies at the Cato Institute, would not resolve other conflicts of interest or restore public confidence in Congress. Instead, she is in favor of policies that promote greater transparency such as reducing the window of time between a trade and the required disclosure or escalating the penalties for incorrectly filing disclosures.
While the push for a stock-trading ban may not be in direct relation with other issues such as inflation, it is important that lawmakers show the public that they are approaching matters with the public interest in mind, said Hempowicz.