The House overwhelmingly passed a slimmed-down version of a bill to ban lawmakers from insider trading Thursday, setting up a battle with senators and the White House over what kind of contact citizens may have with their representatives in Washington.
Known as the Stock Act, the legislation has wide support in both chambers, but partisan divisions are threatening to impede what all sides say is a key test of whether Congress can reach consensus on something President Obama requested in his State of the Union address last month.
The Senate, which passed its bill last week, tried to crack down on what lawmakers say is a burgeoning market in “political intelligence” by expanding the definition of who qualifies as a lobbyist, and added language making it easier to prosecute criminal conduct by public officials.
House Republicans powered their bill through on a 417-2 vote Thursday after dropping the public corruption provision and slimming down the political intelligence language to a study of the consequences of reining in the trade in congressional secrets.
“Think of the wording ‘political intelligence,’ ” House Majority Leader Eric Cantor, Virginia Republican, told reporters. “I mean, there’s so much question about what that even means. And there’s a lot of discussion in this building and elsewhere about what is the consequence of that provision.”
House Democrats all voted for the legislation, saying the chance for a bipartisan solution was too important to pass up. They complained, however, about the procedures Republicans used to debate the bill, including blocking the chance to offer amendments.
House Minority Leader Nancy Pelosi, California Democrat, said GOP lawmakers made some “serious omissions” in their version and she wants to see the lobbying provision added back during negotiations to hammer out a final House-Senate compromise.
“I don’t want anyone to interpret the strong vote for it to be a seal of approval,” Mrs. Pelosi said. “[The vote] just pushes it down the road to be the strongest bill it can be.”
The Senate version included an amendment that could require those who contact Congress to try to find out information on financial matters to register as lobbyists. Opponents said that could end up including people who call their members of Congress to ask the status of a bill.
Sen. Joe Lieberman, Connecticut independent and sponsor of the Senate bill, said Thursday that he prefers the House GOP’s decision to ditch the expanded lobbying provisions.
“From my point of view, it improves the bill because I think we were beginning to tread without enough understanding onto constitutionally protected speech,” Mr. Lieberman told The Washington Times. “We just felt we weren’t prepared for it, and I’m glad the House felt the same.”
But Sen. Charles E. Grassley, the Iowa Republican who championed the provision, said it will bring needed transparency to Washington insiders who sell their knowledge to Wall Street firms. He blasted the House bill Thursday, saying it leaves open a “gaping loophole” that his amendment would fix.
“That bill is coming back here without the Grassley amendment on it, and we need to think about what we’re going to do if you believe in good government,” Mr. Grassley said. “What we’re faced here with is a powerful industry that works in the shadows.”
The main bill seeks to crack down on lawmakers who might be using insider knowledge to enrich themselves.
A “60 Minutes” report last year raised questions about a number of lawmakers on both sides of the aisle who were making financial transactions even as they were negotiating or voting on legislation that could affect industries involved.