Restoring faith in government is an enormous task. Here’s a good way to start: Erect some basic barriers to crookery in Congress.
Lawmakers are privy to all sorts of information that can move financial markets. And they have enormous sway over the economy. And yet, they are still allowed to trade individual stocks. That makes it far too easy for members to abuse their power for their own enrichment — or, almost as bad, to leave the impression that they are doing so.
New legislation from Democratic Senators Jon Ossoff of Georgia and Mark Kelly of Arizona would put an end to that, requiring members of Congress, their spouses, and their dependent children to divest securities and certain other investments or move them into blind trusts. Vanilla investments like diversified mutual funds and treasury bills would not be affected.
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“There’s a lot of influence that people have and access to a lot of information, and there should be a lot of responsibility that goes with that,” Kelly told The Wall Street Journal.
If the policy case for passing the legislation is clear, so is the political case. A December poll commissioned by the conservative advocacy group Convention of States Action found that three-quarters of voters — including overwhelming majorities of Democrats, Republicans, and independents — believe lawmakers and their spouses have an “unfair advantage” in the stock market. A January poll from the progressive firm Data for Progress found two-thirds of voters think lawmakers should be banned from trading stocks.
That kind of public support should make the Ossoff-Kelly legislation a slam dunk for Democratic congressional leaders, who have seen much of their agenda stall in recent months and are in desperate need of some wins before the midterm elections this fall.
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But, apparently, it hasn’t.
House Speaker Nancy Pelosi, whose husband frequently trades stocks, says she is opposed to investment restrictions on lawmakers. “We’re a free-market economy,” she told reporters. “They should be able to participate in that.”
But owning stock and actively trading it are two different matters, and no one is saying that a lawmaker can’t trade after leaving office if they want to put free-market participation above public service.
If Democrats fail to move, they could cede the high ground on this issue to an ethically bankrupt GOP. House minority leader Kevin McCarthy says he may support the push to ban lawmakers from trading stocks if Republicans win control of the narrowly divided chamber in November.
Critics of the new legislation point out that it’s already illegal for members of Congress to trade on insider information under a law known as the Stop Trading on Congressional Knowledge Act of 2012. But that measure, which also requires disclosure of stock market moves within 45 days, hasn’t done enough to buttress public confidence in Congress. And it’s difficult to enforce because it’s harder to prove that a decision to buy or sell a stock is made based on a given piece of information than it is simply to ban active trading.
At the onset of the pandemic, several senators, their spouses, or their investment advisers dumped stock after lawmakers attended private briefings on COVID-19. Some of the sales helped officials avoid hundreds of thousands of dollars in losses when the virus battered the stock market. Lawmakers insisted they hadn’t made use of insider information. And they claimed vindication when the Federal Bureau of Investigation closed their cases.
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But even when these kinds of cases aren’t prosecuted, they can still shake public confidence. And ultimately, public confidence is what matters most here. Trust in government is at worrisome lows. We have seen, all too vividly these past few years, what that can do to a democracy.
So when lawmakers have an opportunity to restore a bit of faith in Washington, they should seize it.
Editorials represent the views of the Boston Globe Editorial Board. Follow us @GlobeOpinion.
