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.
Lawmakers also expressed disappointment that Mr. Cantor ditched an amendment in the Senate bill offered by Sens. Patrick J. Leahy of Vermont and John Cornyn of Texas that gives prosecutors new tools to identify, investigate and prosecute criminal conduct by public officials.
“I’m puzzled why [Mr. Cantor] did that because it passed unanimously here,” Mr. Lieberman said.
Senate Majority Leader Harry Reid is expected next week to summon a conference committee where members of both chambers will meet to hash out their differences [-] a move that signifies the broad support for the Stock Act. Conferences have become rare in Congress over the past few years, with leaders preferring instead to cut deals behind closed doors.
Lawmakers are faced with deciding whether to include or reject a number of other provisions that Mr. Cantor added to the House bill.
He included a restriction on lawmakers and their staff from having unfair access to initial public offerings. House Republicans dubbed it the “Pelosi provision,” a direct reference to the minority leader and the “60 Minutes” report, which suggested that she and her husband profited from an IPO from Visa Inc. at the same time Congress was considering regulations on credit card companies.
Mr. Cantor also included two provisions that would fold the executive branch into existing laws banning members of Congress and staff from influencing employment decisions made by private entities and requiring them to disclose any negotiating they do over a future job.
The two lawmakers who voted against the Stock Act in the House were Reps. John Campbell of California and Rob Woodall of Georgia, both Republicans.