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Senate Ready to Give Up, Pass House Version of STOCK Act

Both the House and Senate have passed versions of the STOCK Act, which would ban insider trading in Congress and accomplish a number of other ethics reforms, with large majorities. The Senate version includes a measure on “political intelligence,” forcing the network of people who hang around Congress and find out tidbits of information that they pass to hedge funds and other interested investors to register like lobbyists. The House version eliminated that measure. Democrats who argued for the political intelligence rules and other elements voted for the STOCK Act to push the process along, hoping for a conference committee to reconcile the two bills.

So of course, instead of a conference committee, the Senate may just go ahead and pass the House version.

Senate Democratic and GOP leaders are considering taking up a House-passed version of legislation barring insider trading by lawmakers and congressional aides, a move designed to break a deadlock over the high-profile reform bill.

Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) have yet to make a final call on that option, GOP and Democratic aides cautioned, but it was under consideration as Congress returned from the weeklong Presidents Day recess.

Reid spokesman Adam Jentleson said taking up the House-passed Stop Trading on Congressional Knowledge Act is one choice for Reid if senators put up obstacles toward convening a House-Senate conference on rival versions of the bill. But Reid will discuss the next steps on the popular measure with his Democratic colleagues this week, Jentleson added.

The only reason for taking up the House bill is convenience and floor time. Reid wants to avoid a series of cloture votes that would come with invoking a conference committee and naming conferees. But the bill has massive support – it ultimately passed 96-3 – so it’s not like there would be a threat of losing any of those cloture votes.

In addition to the political intelligence registration, the House bill dropped language that responded to a Supreme Court ruling on “honest services fraud” by expanding the federal prohibitions against public corruption charges. The House bill also covers executive-branch members on the insider trading provisions, while the Senate bill does not.

Just yesterday, Public Citizen delivered 46,000 signatures on a petition supporting the reinstatement of the political intelligence measure. But Reid seems determined to just get this bill off Congress’ plate by accepting the House version.

This is an inversion of what we saw in the 2009-2010 Congress, when the Senate would plant a flag and the House would have to pass the Senate version of bills. The House’s hands were tied, we were told, because the Senate needed 60 votes and could only deliver so much. Now, it’s the House that plants the flag, and the Senate forced to accept it. That makes little sense on a bill that passed so overwhelmingly in both chambers.

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David Dayen

David Dayen

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