Senator Josh Hawley has stated his intention to bring back the “Pelosi Act” to ban active members of Congress and their spouses from trading stocks, as he believes it raises a conflict of interest.
Senator Josh Hawley reintroduced the legislation, which he claims will curb potential conflicts of interest among elected officials.
Josh Hawley pushes for the ‘Pelosi Act’
Senator Josh Hawley is having a second go at banning members of Congress and their partners from trading stocks while in office by reintroducing the “PELOSI Act.”
The legislation has gained renewed support in recent weeks since Hawley first introduced it in January 2023. The Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act stalled under President Joe Biden’s administration for no specified reason. The former President refused to comment or act on the controversial topic during the majority of his term.
The PELOSI legislation seeks to restrict members of Congress and their spouses from owning or trading individual stocks. According to the bill, any such holdings owned by the affected parties should be stripped or placed into a blind trust within six months of assuming office.
The bill specifically targets individual stock ownership and allows exceptions for diversified investments such as mutual funds, exchange-traded funds, and U.S. Treasury bonds .
The PELOSI Act is named after former House Speaker Nancy Pelosi, whose husband, Paul Pelosi, faced scrutiny over significant stock trades. One particularly notable transaction involved semiconductor stocks shortly before Congress took action on industry subsidies. The Pelosis have so far denied any wrongdoing, but the incident raised calls for stricter regulations on financial activities by lawmakers.
Hawley’s proposal in 2023 also included the intention to amend the Ethics in Government Act of 1978 and reinforce the prohibition against using nonpublic information for private profit. Under the proposed legislation, any profits derived from stock trading by lawmakers would be returned to American taxpayers.
Presidential support for the Pelosi Act
Former President Joe Biden previously expressed his support for banning stock trading by sitting members of Congress. In a statement made a month before the end of his presidential term, he said, on the “more perfect union” podcast, that nobody in Congress should be able to make money in the stock market while they are elected.
“I don’t know how you look your constituents in the eye and know because of the job they gave you, gave you an inside track to make more money. I think we should be changing the law,” he continued
The current President Donald Trump also made his support of the movement known last week by endorsing the idea of banning congressional stock trading in an interview with Time magazine.
“I watched Nancy Pelosi get rich through insider information, and I would be okay with it. If they send that to me, I would do it,” Trump said when asked about the proposal. When pressed by the reporter who asked, “You’ll sign it?” Trump responded, “Absolutely.”
Trump’s endorsement could give Hawley’s bill an important political boost, particularly among Republicans who have been hesitant to pick a side on the topic.
Democrats have also become increasingly vocal about the need for change. Last week, House Minority Leader Hakeem Jeffries vocalized his support for a stock trading ban for members of Congress.
Calls for reform have been building for years. Multiple bipartisan bills have been introduced since 2020 to either restrict or outright ban congressional stock trading. Conducted polls also consistently show that a large majority of Americans would support such a ban, but disagreements over the scope of the rules and how they would be enforced have stalled the progress.
Several Democrats and Republicans have introduced alternative proposals, some of which differ from the PELOSI Act by allowing lawmakers to retain their existing stock holdings under blind trusts rather than forcing them to divest completely once they enter office.
Hawley’s approach is among the strictest and the most direct. By explicitly banning both trading and ownership of individual stocks, the PELOSI Act would close loopholes and remove any temptation or appearance of impropriety, according to his argument.
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