Nearly everyone seems to agree that Congress ought to do something about insider trading by Congressional lawmakers—but there's still disagreement, but under the dome and outside of it, about the best way to do it.
So now that the Senate has overwhelmingly voted to move forward on a bill to stop insider trading among lawmakers and their staff, the bill faces a tough headwind in the House where reps are pushing a broader bill that would include the same restrictions for all federal employees.
"Building upon the Senate bill, this common-sense proposal will not only deal with insider trading of stocks, but also prevent all federal officials and employees from using insider information for profit in other areas in a constitutionally sound way," says Laena Fallon, spokeswoman for House Majority Leader Eric Cantor. Cantor has previously halted efforts to bring legislation similar to the Senate version through the committees. Including federal employees in the bill—a significant Democratic constituency—is likely to set up a showdown between the parties.
Right now, insider trading by members of Congress or federal employees is illegal—just as it is for every other American. But calls for additional restrictions on members of Congress has grown after reports exposed questionable trading by some members, and enforcers from the Security and Exchange Commission said that using existing law to prosecute lawmakers is difficult. The bill would clarify existing law, direct the House and Senate ethics committees to better regulate it, and also require lawmakers to disclose any trades within 30 days.
In his state of the union address, President Obama urged passage of the amendment.
Following the 93-2 cloture vote, which sets the bill up for a vote on final passage on Wednesday, the Senate will now consider amendments for the insider trading bill, another point of controversy. Oklahoma Republican Sen. Tom Coburn, one of the few dissenting votes, claimed the bill was meaningless paperwork.
"We're playing a game with the American people," Coburn says. "This isn't going to change anything, except for requiring a bunch of paperwork to entrap people."
Coburn said he would offer an amendment which would require members of Congress to affirm, under oath, that they've not committed insider trading, rather than adding a new law against it.
Transparency advocates are also questioning the 30-day window.
"Thirty days is too long," says Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. "Considering that trade confirmations are instant now, I don't see why they need 30 days."
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