Should Lawmakers Be Allowed to Trade Stocks? Joe Biden to Leave Decision to Congress

The White House said Tuesday that President Joe Biden will leave the debate on stock trading to congressional lawmakers as some of them have proposed legislation that would prohibit such practice by their colleagues.

White House Press Secretary Jen Psaki was asked during a briefing whether Biden thought lawmakers and their spouses should be allowed to own and trade stocks.

"The president didn't trade individual stocks when he was a senator. That is how he approached things," Psaki told reporters. "He also believes that everyone should be held to the highest standard, but he'll let the leadership in Congress and members of Congress determine what the rules should be."

The response comes as a number of bills have been introduced to prohibit lawmakers from trading stocks.

Democratic Senators Jon Ossoff and Mark Kelly introduced the Ban Congressional Stock Trading Act last week. The legislation would require lawmakers, their spouses and their dependent children to place their stock portfolios into a blind trust.

Ossoff and Kelly said the intention is to prevent congressional members from using any insider information gathered through their elected position to make a personal profit. The penalty for violation of the law would be a fine equal to the amount of their entire salary.

Kelly said the bill will "put an end to corrupt insider trading and ensure that leaders in Congress focus on delivering results for their constituents, not their stock portfolios."

Their legislation is in contrast to House Speaker Nancy Pelosi, who told reporters in December that she was against a prohibition on stock trading after several progressives, including Representative Alexandria Ocasio-Cortez and Senator Elizabeth Warren, denounced the practice.

"We are a free-market economy," Pelosi said at the time. "They should be able to participate in that."

 Biden leaves Stock Trading Decision to Congress
The White House said Tuesday that President Joe Biden will leave the stock trading debate to lawmakers as some consider a ban on the practice. In this photo, a Wall Street sign is seen at the New York Stock Exchange (NYSE) on January 4, 2022 in New York City. Angela Weiss/AFP via Getty Images

Republican Senator Josh Hawley also announced he will introduce the Banning Insider Trading in Congress Act, which would prohibit lawmakers and their spouses from buying and trading individual stocks. Members would need to divest any prohibited holdings or place those holdings in a blind trust for the rest of their time in office. Unlike the Ossoff and Kelly bill, the ban doesn't apply to dependent children.

Under Hawley's bill, those who break the rules will have to turn over any illicit profit to the U.S. Treasury.

"Year after year, politicians somehow manage to outperform the market, buying and selling millions in stocks of companies they're supposed to be regulating," Hawley said in a statement. "Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other at the expense of the country."

Newsweek reached out to Ossoff, Kelly and Hawley for comment on the White House's statement but didn't receive a response before publication.

Updated 1/18/22, 3:35 PM ET: This story has been updated for clarity.