The U.S. Senate has overwhelmingly passed a bill that would prohibit members of Congress, the president and many other public officials from using the inside information they may gain on businesses, government or any other source to benefit financially. In other words, if the bill becomes law, they will be subject to the same rules about insider trading as everyone else.
The public can be excused for wondering how such a thing currently could be considered legal, or that bills to outlaw that sort of profiting have failed in the past. Actually, the law doesn't specifically exempt lawmakers or other politicians, but experts dispute whether such laws do apply. The current bill would remove all doubt.
In part, this was prompted by recent reports that found lawmakers consistently outperforming the market in their investments. In part, it was prompted by historically low public approval ratings for Congress, which some polling services have measured as less than 10 percent in recent months. Several senators commented on the need to restore the public's trust in government.
While we support the bill and believe it is important for public officials to play by the same rules they draft for the public, we're skeptical that this bill would do much to restore public trust. For that to happen, Congress and the president would need to draft a meaningful revenue and spending reform bill that reduces the nation's debt burden and sets it on a track toward fiscal sanity. The current spending trajectory is toward failed credit and much higher inflation as entitlement programs and defense spending grow to levels that can't be sustained.
The failure of last year's "supercommittee" to reach a compromise on such a package did more to destroy public trust than what any ethics bill could replace.
But while we're on the subject, it's worth noting that Congress would remain exempt from other laws. These include the Freedom of Information Act and various laws concerning workers' rights and whistleblowing. If you work for a senator or representative and see him or her doing illegal acts, you can be fired or retaliated against for making those acts known.
Lawmakers in various bodies have been reluctant to apply restrictions to their own actions. That's why various ethics laws have gotten hung up or watered down at the Utah Legislature, and why Utah law does not allow a lawmaker to abstain from voting on a bill that may present him or her with a conflict of interest. In some instances, Utah officials can argue that having a part-time citizen legislature makes for a system in which conflicts are inherent. But that is no excuse for allowing people to personally profit from decisions made on behalf of the public.
The House ought to quickly follow the Senate's lead and pass the insider trading bill. The public's needs should be paramount in Washington. Regaining public trust, however, will involve much more than simply not profiting from acts related to governance. It will require real and courageous leadership, and often compromise, on matters vital to the nation's future.