Updated: 8 p.m.
After hearing the call from President Barack Obama in last week’s State of the Union address, the Senate is expected to clear a bill this week that would clearly ban federal lawmakers and their staff from trading securities on insider information.
The Senate voted, 93-2, on Monday night to kick off debate on the measure.
Senate Majority Leader Harry Reid (D-Nev.) plans to allow for an open amendment process, but not many are expected to be offered given bipartisan support for the bill, Democratic and Republican aides said today.
The bill, known as the Stop Trading on Congressional Knowledge Act, will “clear up any perception that it is acceptable for Members of Congress to profit from insider trading,” Reid said. “And it will end any confusion over whether Members of Congress can be prosecuted for this serious crime — they can be. Colleagues from both parties have expressed support for this common-sense proposal.”
Democrats moved to take up the measure after Obama called for it in his State of the Union address.
“The president called for this bill, and the Senate intends to pass it right away,” a Democratic aide said, adding that Democrats hope a strong show of support would put pressure on House Republican leaders to pass their own version.
Democrats also said the measure would help restore the nation’s trust in government.
“As the President said in his State of the Union message, it is critical that the Congress take steps to restore the American people’s trust in Washington,” the White House said in a Statement of Administration Policy. “Members of Congress should not be able to trade stocks based on nonpublic information gleaned on Capitol Hill. The administration believes this bipartisan legislation is an important first step to prevent Members of Congress from profiting from their positions and calls for swift passage.”
Sen. Kirsten Gillibrand (D-N.Y.), who has introduced similar legislation, said in a conference call today that “the American people need to know that their elected leaders play by the exact same rules that they play by.”
Another supporter is Sen. Scott Brown. The Massachusetts Republican, who has also introduced his own bill, is facing a competitive re-election race against Democrat Elizabeth Warren.
Congressional insider trading is not explicitly prohibited by statute but is outlawed under Securities and Exchange Commission rules.
The bill would also require lawmakers and staffers to report the purchase or sale of stocks, bonds, commodities and other investments within 30 days of the transactions.
The measure is expected to be approved by the Senate this week, likely Thursday, according to a Senate Democratic aide. If the measure clears the chamber this week, Senate Democratic leaders are considering moving to postal service legislation or possibly a compromise bill to reauthorize Federal Aviation Administration programs.
Sen. Tom Coburn (Okla.), who was one of two Republicans to oppose the insider trading measure in the Senate Homeland Security and Governmental Affairs Committee’s markup of the bill, hopes to offer at least three amendments.
Coburn would seek a ban on earmarks, offer an amendment requiring that legislation be put online for 72 hours before votes and propose a requirement that all legislation be reviewed by the Congressional Research Service to determine whether it is duplicative.
According to his office, Coburn believes the bill is a purely political exercise.
“The legislation does nothing to address Congress’ real insider trading scandal, which is when politicians trade the next generation’s opportunities for their political convenience today,” a Coburn aide said.
Another amendment is expected from Sen. Sherrod Brown (D-Ohio), who wants to reduce the requirement that staffers report transactions within 30 days to 10 days.
The amendment “would enhance enforcement of Congressional insider trading rules by requiring disclosure of trades within 10 days, as is required of large shareholders and institutional investment managers,” a Brown aide said.
A Senate Republican aide also said there is a question as to what extent the bill applies to the administration, something that also could be addressed through the amendment process.
In a statement after the vote, House Majority Leader Eric Cantor said he supports the bill if it’s amended to include the executive branch.
“Insider trading by members of Congress is unacceptable, and the public needs to know that the same rules apply to elected officials as everyone else,” the Virginia Republican said.
This article updates the print version to include a statement from House Majority Leader Eric Cantor.