Tangle - Is it time to ban Congressional stock trading?

Episode Date: February 26, 2026

On Tuesday, in his State of the Union address, President Donald Trump called on Congress to pass the Stop Insider Trading Act (SITA), a bill that would bar members of Congress and some immediate family members from trading individual stocks. The line led to one of the few instances of bipartisan applause during Trump’s speech, and the president’s reference renewed discussions over efforts to curtail lawmakers’ trading. Ad-free podcasts are here!To listen to this podcast ad-free, and to enjoy our subscriber only premium content, go to ReadTangle.com to sign up!You can read today's podcast⁠ ⁠⁠here⁠⁠⁠, our “Under the Radar” story ⁠here and today’s “Have a nice day” story ⁠here⁠.You can subscribe to Tangle by clicking here or drop something in our tip jar by clicking here. Take the survey: How do you think Congressional stock trading should be reformed? Let us know.Our Executive Editor and Founder is Isaac Saul. Our Executive Producer is Jon Lall.This podcast was written by: Ari Weitzman and audio edited and mixed by Dewey Thomas. Music for the podcast was produced by Diet 75.Our newsletter is edited by Managing Editor Ari Weitzman, Senior Editor Will Kaback, Lindsey Knuth, Bailey Saul, and Audrey Moorehead. Hosted on Acast. See acast.com/privacy for more information.

From executive producer Isaac Saul, this is Tangle. Good morning, good afternoon, and good evening, and welcome to the Tangle podcast, the place where you get views from across the political spectrum, some independent thinking, and a little bit of R.A. Taked. I'm your host for today, managing editor Ari Weitzman, and the topic du jour is stock trading, particularly how to ban it in Congress, the different laws that are under debate, which ones work, which ones don't, what my take is going to be on it. But before we get into all of that in the intro with the left-right saying,

what my take is, I want to give a couple quick announcements. First, sadly, we do have a correction to issue. In yesterday's edition about the State of the Union, when we were writing about Trump's description of the death of Irena Zerutska, we wrote that she was stabbed on a bus in Charlotte, North Carolina. In fact, she was attacked while riding Charlotte's light rail train. This was a factual era. in the take that escaped our notice when editing, even though painfully, we've gotten it right

before. So thank you to the reader who pointed it out. We apologize for the error. It's our 152nd correction in our 342 week history and our first correction since February 18th. We track corrections. We put them at the top of our newsletter and podcast in an effort to maximize transparency with readers. Tomorrow, I'll be drafting a Friday edition about the Olympics. We've been talking about the Winter Olympics a lot, both behind the scenes and on air for suspension of the rules, the politics of the Olympics, how unifying they are. And right at the end there, we got this big controversy about the Olympic men's hockey team. I'm going to get into that for this Friday edition, as well as discuss the transcendent Alyssa Lou and other U.S.

athletes. I think you guys would probably at least be interested in what I have to say. But without further ado, we're going to get to today's main topic, which is the ban on congressional stock trading. I'm going to send that over to Audrey, and I'll be back for my take. Thanks, Ari. Here are today's quick hits. Number one, Cuban soldiers killed four people and wounded six others

in an incident off the country's coast, according to Cuban officials. The government said that those killed and wounded were in a Florida registered speedboat and opened fire on Cuban soldiers, injuring one. The alleged assailants are believed to be Cuban nationals living in the United States. But U.S. Secretary of State Marco Rubio said the U.S. is gathering its own information. Number two, the Senate Health Committee held a confirmation hearing for Casey

Means, a physician and wellness influencer who is President Donald Trump's nominee for Surgeon General. Lawmakers questioned Means about her stance on vaccines in autism, as well as her advocacy for the Make America Healthy Again agenda. Number three, Iran and the United States are holding a third round of indirect talks on Iran's nuclear program. Ahead of the talks, Secretary of State Rubio said Iran's refusal to discuss its ballistic missile program was, quote, a major problem, while an Iranian foreign ministry spokesperson said the country is approaching the talks with, quote, seriousness and flexibility. Number four, a federal judge ruled that the Trump administration cannot deport non-citizens

to countries to which they have no existing connection, that non-citizens must receive adequate notice of removal, and that non-citizens have an opportunity to challenge the decision. Number five, Microsoft co-founder Bill Gates apologized to the Gates Foundation's staff over his relationship with convicted sex offender Jeffrey Epstein, but denied any criminal wrongdoing. Gates also admitted to having two affairs while he was married, but said they did not involve Epstein's victims. Separately, former U.S. Treasury Secretary Larry Summers announced his resignation from his professorship at Harvard University amid scrutiny of his relationship with Epstein. Talking about stock trading in Congress. And right now there is a big bipartisan push to ban

members of Congress from trading stocks. We've heard from Representative Tim Burchett of Tennessee before the first hearing on this in the House in more than three years. And, you know, he's pretty frank here. He said, we all know what's going on. Congress knows what the hell is going on. And it needs to stop. On Tuesday, In his state of the union address, President Donald Trump called on Congress to pass the Stop Insider Trading Act, a bill that would bar members of Congress and some immediate family members from trading individual stocks. The line led to one of the few instances of bipartisan applause during Trump's speech, and the president's reference renewed discussions over efforts to curtail lawmakers'

trading. Representative Brian Stile of Wisconsin introduced SITA in January, and it has been referred to the committee on House administration. Under the current text, any member of Congress, their spouse, and their dependent children would be prohibited from purchasing individual publicly traded stocks and must provide seven to 14 days of public notice before selling stocks, options, and warrants. However, the bill would allow members of Congress to invest in diversified funds. Those found in violation would face a penalty of $2,000 or 10% of the transaction's value, whichever is greater. Currently, Congressional Stock Trading is regulated by the 2012 Stop Trading

on Congressional Knowledge, or Stock Act, which prohibits members of Congress, their staff, and executive branch officials from using non-public information for personal gain. The law also requires members of Congress to disclose stock trades of more than $1,000 within 45 days. However, critics have said that the law is regularly violated and lacks sufficient deterrence measures,

calling for additional legislation to address trading loopholes. The Stop Insider Trading Act is just one of several similar bills, introduced this Congress. Also in January, Representative Zachary Nunn of Iowa introduced the No Corruption and Government Act, which would ban members of Congress and their spouses from trading stocks, but allow them to use qualified blind trusts. Other examples include the End Congressional Stock Trading Act, introduced in March 2025, the halting ownership and non-ethical stock transactions act, introduced in April 2025, and the Restore Trust in Congress Act, introduced in September in 2020. Many of these bills have Democratic co-sponsors, but none of them have advanced to a vote

in either chamber. These legislative efforts follow increased scrutiny of lawmakers' stock trading. A 2022 New York Times analysis found that between 2019 and 2021, 97 lawmakers or their family members bought or sold financial assets while sitting on committees that potentially gave them influence over industries affected by their trades. The report flagged over 3,700, 2026. The report flagged over 3,700 total trades during this time period that raised potential conflicts of interest. Today, we'll survey arguments on congressional stock trading bans with views from the left and the right. Then, Tangle's managing editor Ari Weitzman will give his take. We'll be right back after this quick break.

First, here's what the left is saying. The left supports congressional stock trading bans, though many push for reform stricter than the bill Trump endorsed. Some say lawmakers shouldn't be allowed to trade even if they aren't benefiting from privileged information. Others note how common stock trading is among both parties' representatives. In USA Today, Chris Brennan argued Trump's State of the Union insider trading push isn't reform.

It felt incongruous, a wealthy politician like Trump calling for reform and how members of Congress profit in the stock market. Here was Trump, presenting a worthy idea with broad support from the public. But the more you know about what Trump wants, the less impressive it gets. The legislation he touted in his speech is at best reform light and at worst, just more self-dealing disguised as reform. The Stop Insider Trading Act is opposed by exactly the kinds of good government groups that support reform and how members of Congress trade stocks. These groups noted that the Stop Insider Trading Act, quote, does not ban members of Congress from owning stock, profiting from stock trades or making decisions that would increase the values of their stock portfolio

that they hold. That legislation, the groups added, also allows stock purchases of private companies, cryptocurrencies, corporate bonds, and other financial instruments. The Restore Trust in Congress Act, by contrast, quote, effectively bans members of Congress from buying, selling, and owning stocks, and their equivalence, and ends the conflict of interest that have played Congress for too long. The Bloomberg editorial board said Congress has no good excuse to keep trading stocks. It's a poor look for legislators to be buying and selling stock in companies over which they hold sway. In recent years, analyses have found that 97 lawmakers had bought or sold stock in companies that intersected with their committee work, including more than a dozen members who oversaw the Pentagon and had financial ties to defense contractors.

Efforts by lawmakers to regulate themselves have not been notably successful. In 2012, they passed the Stock Act to require that trades worth more than $1,000 be disclosed within 45 days. Yet members have routinely failed to comply with their requirement. There's no reasonable defense for this. After all, owning low-cost index funds should under normal circumstances be far preferable to dabbling in individual stocks. And restrictions on personal trading are hardly unusual in industries, such as finance and the news media, that are keen to prevent conflicts of interest and preserve customers' trust. A seat in Congress comes with many privileges.

Day trading shouldn't be one of them. In Chicago in 2022, Branco Marketic wrote, Congress is day trading while the world burns. The way U.S. politicians talk about their country, you'd be forgiven for thinking that American society is a business. And the way they buy and sell shares, you'd be forgiven for thinking Congress is less a deliberative body for crafting laws than an extension of the stock market.

House Speaker Nancy Pelosi of California, who just recently defended congressional stock trading by arguing the United States is a free market economy, continues to lead the field in options trading, having bought $12.75 million worth of options contracts in 2021. Should the push for a full ban be actually serious and successful, it will only be one small step in ending the open corruption of the U.S. political system.

Members of Congress will still continue to be bribed with campaign contributions and corporate jobs, while U.S. politics continues logistically to be almost exclusively limited to the wealthiest strata of society, the very people most likely to trade in stocks and otherwise invest on the side as they set public policy. Still, a law banning the practice is long since needed and would be more than welcome. That's it for what the left is saying. Now let's hear from the right. Many on the right support the proposed bans, saying they're key to restoring trust in Congress. Some say evidence of lawmakers making unethical trades is scarce. Others suggest any band must be part of a broader oversight effort. In the Washington

examiner, Dylan Hetler-Gadet wrote, banned congressional stock trading. There are a few things more damaging to public trust in our democracy than the perception that lawmakers are lining their own pockets at the expense of the people they serve. For years, the public has watched both Republican and Democratic members of Congress buy and sell individual stocks, sometimes right before key legislation moved or damaging reports broke. It's not just a bad look, but also a glaring ethical failure. Insider knowledge about upcoming regulations, committee decisions, industry trends, or national security developments, gives elected officials a leg up in ways that an average citizen cannot hope to match.

The solution is clear. Require lawmakers to divest from individual stocks or place them in a blind trust while serving in office. This is not an extreme position. In fact, it's supported by an overwhelming majority of people. cynicism is spreading, especially among those who see Washington as a place where one set of rules is written for average people and another for the powerful. Passing a ban on congressional stock trading would be a significant step toward rebuilding the public's faith in our institutions. The Wall Street Journal editorial board said, let voters judge Congress's stock trading. The 2012 Stock Act already prohibits Congress from trading on non-public information.

If that law needs stronger oversight or enforcement, fine. transactions over $1,000 are publicly disclosed, and constituents are always free to fire a congressional day trader. Only about half the Senate and a third of the House held individual stocks last year, according to a journal analysis. But voters can judge if that's disqualifying. President Trump didn't divest his assets to resolve business conflicts, and the public put him in office anyway.

There are 535 members of Congress. So even if they were trading randomly, it wouldn't be too hard to find some transactions that could look bad. News stories promising scandal sometimes note deep into the text that the politician in question says the portfolio is run by some outside financial advisor. An academic study of congressional trading from 2012 through 2020 found no evidence of superior investment performance, but found returns consistent with random stock picking. In the Portland Press Herald, Jim Fossel called trading bans tricky and necessary. The proposed bans don't apply to other people who are very

close to members. That includes mistresses, which of course typically isn't public knowledge, but also college roommates, lawyers, golf buddies, uncles, you name it. Again, a member of Congress already can't pass along insider information to any of these people, so a sweeping ban on them is both unnecessary and legally untenable. Just like with the COVID trades, it's already illegal for a member of Congress to share insider information with any of those people. It's just difficult to prove. The ban on congressional trading is of a similar variety, but it's also so specifically and narrowly tailored that it's easy for people to get around. These proposals also do not cover the president, vice president, or the executive branch, nor do they cover congressional staff. Those people can have

just as much access to inside information or more as members of Congress. That's not a reason to oppose this pending legislation, however. They could be covered by future proposals. That's it for what the left and writer is saying, so now I'll hand it over to Ari for his take. Thanks, Audrey. That brings me to my take. Among my college friends, the dogma of our university's School of Economics was something of a meme. People respond to incentives. That was the credo that allowed Freakonomics author and University of Chicago economics professor Stephen Levitt to argue that we should pay kids for doing well on their SATs, and we should not find parents for picking up their children late from daycare. That creedo also allowed us undergraduates,

to argue, only somewhat ironically, that we should make beer available for free at our parties, and if we were getting tired anyway, we should just leave class early. Then, as we left college and got older, we used it to almost double ironically justify selfish decisions we make as individuals, even if we know the consequences of those decisions on a larger system aren't great. Drive there, because taking the bus just takes longer. Purchase the cheaper, fast-fashioned pair of jeans. Maybe even buy stock in your friend's company when you hear that they're getting required. You shouldn't, but nobody would really notice a purchase this small and it's a guaranteed buck. People respond to incentives.

And the incentives for these people in Congress are never going to stop them from profiting on their offices unless they're offered something valuable in return. That may be too cynical take for Tangle, but let's be realistic here. Representative Tom Swazzi, the Democrat from New York, netted a 35% return on stocks after he entered Congress. And his net worth chart is a mockery of civic responsibility. It just goes up into the right as soon as he enters office. Still, he may not be as bad as Representative Rob Bresnahan, the Republican from Pennsylvania, who campaigned on banning stock trading and yet has become one of the freshman class's most prolific stock traders.

When confronted on this apparent hypocrisy, Breznihan's response was almost the same as Nancy Pelosi's. I never trade my own stocks. A little bit of background on me. A while back, I lived in Pelosi's district in the Bay Area for a number of years. I remember going to her office as a constituent of hers, and I'll never forget a picture she had on display in her waiting room. She and her daughter, surrounded by fog, in the middle of the Golden Gate Bridge, with no cars and no pedestrians anywhere in frame.

Can you imagine the kind of influence a person must have to use the Golden Gate Bridge, perhaps the country's most important mile-long stretch of wordway for a private photo shoot. The image conveyed something important to people like me who are hoping for a minute of representative then-speaker Pelosi's time. The person who occupies this office wields immense power, and she isn't afraid to do so to her benefit. Obviously, it's a problem if our representatives can use their offices for personal gain. That is the textbook definition of corruption. It allows people whose job it is to look out for the national interest to also weigh what might benefit them. As it is now, public office presents too strong an opportunity to profit from the information

that circulates the halls of Congress for us to just blithely hope our representatives don't capitalize on their stations. People respond to incentives. About a third of Congress reported trades by themselves or immediate family members between 2019 and 2021, and over half of them, 97 lawmakers in total, served on committees that could have informed those trades. And those are just the ones we know about. Senator Mark Wayne Mullen, Republican from Oklahoma, failed to disclose hundreds of trades for a year, which makes sense since the existing penalty under the Stock Act

for violating disclosure requirements is a $200 fine. That law does also have steeper civil forfeiture penalties in jail time for insider training, but those theoretical penalties may bizarrely be too strong. No member of Congress has ever been prosecuted under the Stock Act, including those who made lucrative trades after receiving privileged information during the COVID-19 pandemic. And that could just as easily be proof that the kind of insider trading the Stock Act bans is simply too hard to prove, but either way.

A law that severely punishes only certain kinds of stock trades clearly is just not working. And again, the people who came to Congress under this incentive structure, many of whom have now accumulated net worth safely into the seven-figure range, they aren't going to vote for a change that would actually restrict themselves. Or, as Senator Ron Johnson, the Republican from Wisconsin, said, he won't support a law that would make running for office, quote, unattractive. Now, to be fair, I don't think Johnson's view represents the majority opinion in Congress, but still, the bills as colleagues have put forward to address this issue lack teeth. The one President Trump supports, the Stop Insider Trading Act, only applies to Congress, does not

require divestment, and it fails to prevent members of Congress from profiting off trades. As such, that bill is opposed by many pro-reform advocacy groups. The law most favored by those groups is the Restore Trust in Congress Act, which requires divestment and assets, bans new purchases, and would penalize any violators with profit forfeiture. It has some problems, family members whose primary occupation is training stocks are exempted, as are family trusts, and we still can only hope that the law would actually be enforced, but it is the best of the current reform options, and it's never going to pass. House Speaker, Mike Johnson, won't let that bill reach the floor because you probably already know,

Quote, you don't want another deterrence for good people running for office, end quote. People respond to incentives. If you want to actually restrict stock trading and the wide open path to personal enrichment, it provides any meaningful restriction on that path has to, as disgusting as this sounds, broaden another. My proposal is immensely unpopular. I think it might be the most unpopular position of all my, political opinions. We should give every member of Congress a raise, conditioned on passing a strict ban on training. Their salary right now is $174,000 a year plus incredible health benefits. I say it should be at least $300,000, a raise that would make a final tax hit on the American people of $54 million, or about 0.000-77% of the federal budget, or about a fifth the cost of one military aerial refueling tanker.

I know giving Congress more money doesn't sound like a great solution to the problem of them making too much money, but think about it. If you make it easier for elected officials to make money by simply doing their job, then the draw of stock trading isn't so alluring. And to Speaker Johnson's point, if you raise the salary for a position, you attract the best candidates. If any stock training ban is connected to a substantial pay raise, then how can any member of Congress possibly complain that that ban would be a, quote, deterrence for good people running for office? Banning stock trading is an idea whose time has come. But if we ever dream of the group of people who currently occupy our federal legislature, passing stock trading, passing stock trading, is an idea whose time has come.

occupy our federal legislature passing such a reform, it has to come with incentives they will actually respond to. Ban stock trades, enforce the laws, give Congress a raise, and encourage the best people, not the people who are best at leveraging their power to run for office. That's it for my take. I'm passing it over to our associate editor, Lindsay Canuth, who has a dissent. Thanks, Ari. This is Associate Editor Lindsay Canuth with a staff. I was with Ari until the end when he suggested paying members of Congress a higher salary to bandage the wounds left by banning stock trading. Justifying a raise in this way is like offering a penny to a millionaire, on the condition they stopped the corrupt practice that enriched them

in the first place. But more importantly, I believe thinking about their pay through incentive structures is a wrong-headed approach. Members of Congress are beholden to us. Call me old-fashioned, but being one of the 535 people chosen to represent the American people should be enough of an incentive for qualified candidates to want the job. Their pay of $174,000 per year already puts them around the 90th percentile of income earners in the U.S., depending on household size. A raise to $300,000 would put them in the top 3%. Getting our elected representatives to do their job shouldn't require a quid pro quo. We'll be right back after this quick break.

All right, thanks, Lindsay. A lot I could say, but we'll leave you the last word there. And we'll send it over to your questions answered, which today comes from Bob, who submitted this question through our texting service subtext. Bob asks, your analysis of the tariff's decision gives too much weight to major questions. Why does this president get so much deference when it did not exist prior to the makeup of this SCOTUS? First, let's define our terms. Broadly, the major questions doctrine is a Supreme Court test for executive branch actions. that have not been explicitly delegated by Congress. When the court applies the major questions doctrine,

it first reviews whether the standard under its review constitutes a major question, with broad economic or political significance. Then, it considers whether an action taken by the president or by an executive agency, like the EPA, was clearly delegated to the executive branch by Congress. Judges and scholars who favor the doctrine argue that only Congress has the power to issue

broad rules and regulations, and that Congress's delegations to the executive branch must be clearly defined. Critics of the test argue that broad application rests interpretive power away from the executive and undermines the clear congressional authority granted to various agencies. Yes, the major questions doctrine has only recently become routinely applied by the Supreme Court, but it did exist before the Roberts Court. And while it is mostly applied by the court's conservative justices, it isn't only a conservative principle. According to a Yale Law Journal Review, the major questions doctrine was first raised as a potential legal test by none other than former Democrat-appointed Supreme Court Justice Stephen Breyer in an article he penned while serving

as a U.S. Circuit judge. Breyer's initial theory was relatively narrow. He argued that courts should first consider the weight of a legal question before deciding whether to defer to an agency's interpretation of a statute. The Supreme Court then used a version of Breyer's doctrine for the first time in Food and Drug Administration v. Brown and Williamson Tobacco Corp in 1994. That was just one month before President Bill Clinton nominated Breyer to the Supreme Court. Breyer sometimes applied and sometimes rejected the major questions doctrine while he was on the bench. Most notably, he descended from a 1999 decision in which the majority opinion cited his own article. Some scholars argue that there are actually two major questions doctrines.

The first, a narrower principle that's in line with regular statutory interpretation and the second, a much more expansive form of judicial review that is developed as the Roberts Court has become increasingly restrictive of executive power, such as through its overturning of Chevron in 2024. But no matter how you parse it, the major questions doctrine is a useful tool the court has developed to allow it to interpret when the executive branch is overreaching. All right, that's it for your question. questions answered. I'm going to throw it back to Audrey for the rest of the pod.

Thanks, Ari, and now for our Under the Radar story. On Tuesday, NPR reported that the Department of Justice withheld or removed documents in its release of millions of files related to convicted sex offender Jeffrey Epstein that mentioned President Trump, including notes from a Federal Bureau of Investigation interview with a woman who claimed Trump sexually abused her when she was a minor. The report comes as the DOJ denies claims that it withheld records to protect public officials or other individuals, saying that the remaining unpublished files are privileged, duplicates, or relate to an ongoing federal investigation. However, on Wednesday, it said it is reviewing whether any documents containing mentions

of Trump or improperly withheld. Democrats on the House Oversight Committee also announced an investigation into the report. NPR has the story, and you can find the link in the show notes. And finally, it's time for our Have a Nice Day story. Over the six semesters and counting that Tangle's College Ambassador program has and active, its footprint has steadily increased. In the fall 2023 semester, the program launched with a cohort of three students. This semester, it has 45. One student, Sam Fournier, has focused his efforts on adapting the Tangle coverage model to a campus setting, establishing an official Tangle Club at George Mason

University. In Fournier's words, quote, the goal is to establish a common ground based on the facts and come together to hear other people's ideas by engaging with students of different political views, majors, and upbringings. Renata Perna Grosva, another Tangle College ambassador, profiled the club and for the state. And you can read the profile in the show notes. All right, everybody, that's it for today's episode. And remember, as always, if you want to support our work, head over to retangle.com to sign up for her membership. I'm going to be back in your ear tomorrow with Friday edition about the Olympics. I hope to hear from you then. Until tomorrow, have a good one. Take care. Peace.

Executive editor and founder is me, Isaac Saul, and our executive producer is John Lull. Today's episode was edited and engineered by Dewey Thomas. Our editorial staff is led by managing editor Ari Weitzman with senior editor Will Kayback and associate editors Audrey Moorhead, Lindsay Canuth, and Bailey Saul. Music for the podcast was produced by Diet 75. To learn more about Tangle and to sign up for a membership, please visit our website at retangle.com.