Sagging approval ratings brought Democrats and Republicans together Thursday, as the Senate passed a bill to explicitly prevent members of Congress, their top aides and administration officials from using non-public information for insider trading. New disclosure requirements will require public reports online within 30 days of buying and selling stock.
The 96-3 vote sent the bill to the House, where Majority Leader Eric Cantor said the legislation would be considered next week.
Senators in both parties acknowledged the purpose of the legislation was to help dig members of Congress out from poll approval ratings that have fallen to the teens after a year of excessive partisanship pervading almost every issue before Congress.
"When polls show low public confidence in Congress, there is a strong desire to address the concerns that underpin the public's skepticism," said Sen. Susan Collins, R-Maine, one of the bill's managers.
President Barack Obama praised the Senate and said he's ready to sign a bill known as the STOCK Act, which stands for Stop Trading on Congressional Knowledge.
"No one should be able to trade stocks based on nonpublic information gleaned on Capitol Hill," the president said. "So I'm pleased the Senate took bipartisan action to pass the STOCK Act. I urge the House of Representatives to pass this bill, and I will sign it right away."
Obama said still more ethics restrictions were needed, "like prohibiting elected officials from owning stocks in industries they impact."
Several amendments were added to the bill before final passage.
Sen. Richard Shelby, R-Ala., won an amendment to include the 28,000 government workers in the executive branch in the bill, saying it would create a level playing field with the requirements for Congress. But the same amendment included conflicting language by Sen. Joseph Lieberman, I-Conn., that would apply to only 2,000 top policymakers — including the president, vice president and members of the Federal Reserve Board.
A House-Senate conference will have to reconcile those two measures.
Sen. Charles Grassley, R-Iowa, successfully added language that would require "political intelligence" operatives to register and disclose affiliations, the same as lobbyists. These individuals are hired by stock traders to obtain useful information from members of Congress and their staffs.
Sens. Barbara Boxer, D-Calif., chairwoman of the Senate's ethics committee and senior committee Republican Johnny Isakson of Georgia, won an amendment that would force disclosure of all residential mortgages — by members of Congress, the president, the vice president and most Senate-confirmed appointees. Currently senators are not required to list all mortgages.
The Securities and Exchange Commission said laws prohibiting trading on inside, non-public information clearly cover members of Congress. In 2005, the SEC investigated then-Senate Majority Leader Bill Frist of Tennessee concerning his divestiture of stock in the family's hospital company days before its price fell on an analyst's forecast. Frist was not charged with wrongdoing.
To a large extent, Congress is reacting to a segment on CBS' "60 Minutes" that raised questions about stock trades by House Speaker John Boehner, the husband of House Democratic leader Nancy Pelosi and Rep. Spencer Bachus, R-Ala., chairman of the Financial Services Committee. All have denied wrongdoing and denounced the network's story.
Republicans insisted on including top government officials outside the Congress in the bill even though they also are covered by insider trading and face tougher conflict-of-interest restrictions than members of Congress. In some cases, executive branch officials are required to divest themselves of stock holdings that pose a conflict. Lawmakers don't have to do that and the Senate bill would not require it.
In addition to the 30-day online reporting requirement, the Senate would have to join the House in posting members' annual financial disclosure statements online instead of making only paper copies available on request.
Sen. Rand Paul, R-Ky., proposed wiping out the entire bill and substituting a simple certification by senators each year that they did not participate in insider trading. It was defeated, with 37 senators voting "yes" and 61 opposed.
Voting against the bill were Sens. Jeff Bingaman, D-N.M. and two Republicans: Tom Coburn of Oklahoma and Richard Burr of North Carolina.