House Republicans will try Thursday to push through a popular bill that ensures insider-trading rules apply to members of Congress after GOP leaders ditched a provision to expand the definition of who qualifies as a lobbyist.
The White House and some lawmakers complained that the exclusion waters down the bill, but it stopped short of saying they would try to block the legislation. It is expected to pass the House and then go to a conference committee where differences with a Senate version can be worked out.
When Majority Leader Eric Cantor released his own version of the Stop Trading on Congressional Knowledge (STOCK) Act, he chose not to include a requirement that anyone engaged in “political intelligence activities” must register as a lobbyist — a sweeping provision the Senate added to the bill last week.
Mr. Cantor’s staff said the provision was too broad with too many unintended consequences, but the White House opposed his decision, saying it brings needed transparency to a lucrative political intelligence market where Wall Street firms pay Washington insiders for scoops.
“I was shocked to see that even this simple bill that would ensure that … everyone plays by the rules, is being weakened behind closed doors by House Republicans who seem to be caving to pressure from Wall Street lobbyists,” White House spokesman Jay Carney told reporters Wednesday.
But spokeswoman Laena Fallon said Mr. Cantor worried it could hurt First Amendment rights and needed to be studied more. The same concerns also were voiced by Sen. Joe Lieberman, Connecticut independent, who opposed the provision in the Senate.
Analysts have worried that average citizens could be swept up in the new rules, which are vague about what qualifies as political intelligence.
“This provision was extremely broad, and its impact would have raised more questions than it answered,” Ms. Fallon said. “Worse, the unintended consequences on the provision could have affected the First Amendment rights of everyone participating in local rotaries to national media conglomerates.”
Mr. Cantor’s stance on the provision prompted criticism from Republican and Democratic lawmakers. Sen. Chuck Grassley, who sponsored the provision which passed on a 60-39 vote, said it represented a victory for Wall Street interests.
“It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision,” said the Iowa Republican, adding, “If Congress delays action, the political intelligence industry will stay in the shadows, just the way Wall Street likes it.”
Rep. Timothy J. Walz, Minnesota Democrat, and Louise McIntosh Slaughter, New York Democrat, who have sponsored STOCK Act legislation for years, also charged Mr. Cantor with weakening the legislation. They already were frustrated by how Mr. Cantor had bypassed their own bill and crafted his own House version.
“The thing we greatly feared has come upon us,” Mrs. Slaughter told reporters on Wednesday. “It has been weakened, totally, as far as I’m concerned.”
The lobbying provision was among a number of amendments senators tacked on to the STOCK Act last week before approving it 96-3. The House version shares the same core intent — to affirm that an existing ban on insider trading applies to members of Congress and the executive branch.
Mr. Cantor had expressed support for the Senate bill, but said he planned to strengthen the House version. In addition to stripping out the lobbying rules, his bill also restricts lawmakers and their staff from having unfair access to initial public offerings.
House Republicans have dubbed it the “Pelosi Provision,” a direct reference to Minority Leader Nancy Pelosi and a “60 Minutes” report that suggested she and her husband profited from an IPO from Visa Inc. at the same time Congress was considering new regulations on credit card companies.