Trump's State of the Union insider trading push isn't reform | Opinion

President Donald Trump's 108-minute State of the Union address on Feb. 24 was a largely unsurprising and uninspiring screed, but he did find a brief moment of consensus with Democrats in Congress, even as he tried to demonize them.

It felt incongruous, a wealthy politician like Trump calling for reform in how members of Congress profit in the stock market. Here was Trump, presenting a worthy idea with broad support from the public.

But the more you know about what Trump wants, the less impressive it gets.

In his 44th minute of speaking, Trump asked the senators and representatives listening to "ensure that members of Congress cannot corruptly profit from using insider information," asking them to pass the Stop Insider Trading Act.

Republicans, who jumped to their feet all night long to cheer Trump, stood to clap. Democrats joined them.

"They stood up," Trump said, looking at the Democrats, sounding amazed. "I can't believe it."

Then, being Trump, he had to take a dig at an old nemesis, asking if former House Speaker Nancy Pelosi was standing, while saying he doubted it. Rep. Pelosi, a California Democrat, has long taken political heat for her husband's stock trading. She said after Trump's speech that she did stand up with her Democratic colleagues.

Trump's Stop Insider Trading Act deserves scrutiny

Trump could have called out plenty of politicians in the House chamber during his speech.

U.S. Rep. Rob Bresnahan, a Republican serving his first term in Pennsylvania, is facing a difficult midterm election in November after he campaigned in 2024 on regulating stock trading in Congress and then became a prolific stock trader in Congress.

U.S. Sen. Susan Collins, a Republican from Maine, faces a challenging bid for a sixth term as a Democratic political action committee is highlighting in ads her stock trading and opposition to legislation to regulate that.

Trump is an unlikely messenger here to oppose this sort of apparent self-dealing in Congress, given that he has used his second term as president to enrich himself and his family. Nothing new here. He did the same in his first term.

The president's ask of Congress deserves scrutiny. The legislation he touted in his speech is, at best, reform-light and, at worst, just more self-dealing disguised as reform.

The Stop Insider Trading Act, introduced in the House on Jan. 12, has 91 Republican sponsors but just two Democratic backers.

That legislation is opposed by exactly the kind of good-government groups that support reform in how members of Congress trade stocks. And they let Congress know about it in a Feb. 12 letter.

Those groups – the Campaign Legal Center, Citizens for Responsibility and Ethics in Washington (CREW), Common Cause, Democracy Defenders Action, Issue One, P Street, Project on Government Oversight and Public Citizen – urged the House and Senate to instead back a beefier, bipartisan effort at reform.

There's a better bipartisan shot at reform

The Restore Trust in Congress Act, introduced on Sept. 3, has 128 sponsors: 98 Democrats and 30 Republicans. It also has a bipartisan companion act in the Senate, introduced in January.

In the House, 65 Democrats and 15 Republicans have signed onto a discharge petition, in hopes of forcing a vote on the Restore Trust in Congress Act.

The good-government groups, in their letter to Congress, noted that the Stop Insider Trading Act "does not ban members of Congress from owning stock or making decisions that would affect the value of the stocks they hold. It does not prevent members of Congress from profiting off stock trades. It does not prevent members of Congress from profiting off ownership or trades of other asset classes."

That legislation, the groups added, also allows stock purchases of private companies, cryptocurrencies, corporate bonds and other financial instruments.

The Restore Trust in Congress Act, by contrast, CREW said in announcing the letter, "effectively bans members of Congress from buying, selling and owning stocks and their equivalents and ends the conflicts of interest that have plagued Congress for far too long."

A May study from the University of California San Diego's Rady School of Management found bipartisan support, with more than 86% of Americans supporting a ban on stock trading in Congress.

A 2023 poll from the University of Maryland’s School of Public Policy also found bipartisan support for banning stock trading in Congress, with Democrats, Republicans and independents all supporting that by more than 80%.

And a 2022 poll by Stand Up America and Data for Progress put American support for banning stock trading in Congress at nearly 80%.

So here we are, in this time of deep political division, with a rare opportunity at bipartisan agreement on reform for something American voters clearly want, with the midterm elections looming in November that will decide who controls Congress next year.

Forget the feel-good and make-money fake reform of the Stop Insider Trading Act. Pass the Restore Trust in Congress Act instead. Give Americans what they really want – reform that stops the people who represent them in Congress from profiting off the information they receive on the job and the businesses they regulate.

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