Congressional leaders see far higher stock returns than peers

Over 100 members of Congress have cosigned the Restore Trust in Congress Act, which would prohibit members of Congress and their immediate families from buying and selling individual stocks. Despite broad bipartisan support, congressional leadership has not yet allowed the bill to be brought to the floor.

A new working paper in the National Bureau of Economic Research indicates that stock-related gains are most concentrated among congressional leaders rather than rank-and-file lawmakers. The authors find that lawmakers who eventually rise to leadership roles perform roughly in line with comparable peers before entering leadership, but after entering leadership, they outperform those peers by an average of 47 percentage points annually.

The study, conducted by Shang-Jin Wei of Columbia University and Yifan Zhou of Xi’an Jiaotong-Liverpool University, identifies two main drivers of these elevated returns. The first is direct political influence, which is most apparent when the leader’s party controls the chamber. In those circumstances, lawmakers in leadership and at the top of committees are more likely to sell shares before regulatory action and to buy them before federal contracts are issued or favorable legislation is enacted.

The other is that leadership figures and top committee chairs enjoy privileged access to nonpublic signals about major companies, particularly those tied to key donors or home-state industries. As a result, their trades tend to anticipate corporate developments and deliver substantially higher returns than the broader market.

The most frequently cited example of congressional leadership producing outsized returns is former Speaker Nancy Pelosi. Since the STOCK Act of 2012 was implemented, Pelosi’s investments have returned approximately 854%, far above the SPY market index return of 263%, according to Quiver Quantitative, one of the many firms that tracks Pelosi and other members’ stock trades. The STOCK Act requires public reporting of trades by members of Congress within 45 days and prohibits the use of nonpublic information for personal financial gain. However, no member of Congress has ever been criminally prosecuted under the act.

While Pelosi ranks among the top performers in congressional stock returns for senior members, Sen. Ron Wyden and his wife, Bass Wyden, posted even stronger results in 2024. At the time, Wyden chaired the Senate Finance Committee, and their public portfolio gained approximately 123.8%, far exceeding Pelosi’s ~70.9% return and the S&P 500’s 24.9% gain that year. In 2023, his return ranked among the highest at ~78.5%, exceeding the S&P 500’s 24.8% and Pelosi’s ~65.5%.

Wyden and his wife’s trading volume was comparatively modest relative to their overall holdings in both years. In 2024, they sold between $100,000 and $250,000 of UPS stock, which has since declined from $147 per share to $99 per share; in 2023, they reported no new stock purchases or sales.

Nearly all of their outsized gains trace back to stock purchased between April and November 2020, investments they have largely held. During that same period, Wyden’s wife drew scrutiny after laying off employees from her New York City bookstore, The Strand, early in the pandemic. She later accepted between $1 million and $2 million in PPP funds, even though 188 of the store’s 212 employees had already been laid off. At the same time, disclosures show she purchased between $3 million and $7.9 million in stock.

Both parties’ leadership and top committee heads tend to record outsized returns. Rank-and-file lawmakers, however, perform similarly to or worse than market indexes according to the study. In 2024, Republicans and Democrats outperformed the S&P 500 by only 1% and 6% on average, respectively, suggesting that while some at the top of the parties with greater access to information or influence, such as Wyden and Pelosi, earn substantially higher returns, many actually underperform the broader market.

Speaker Mike Johnson has refused to bring the stock-trading ban to the floor, saying, “You don’t want another deterrence for good people running for office.” He later added that he still does not want “people cheating the system and abusing their office.”

The Restore Trust in Congress Act would require all members of Congress, their spouses, and dependent children to sell all individual stock holdings within 180 days of passage, and would require all future members to do so within 90 days of taking office. They would still be permitted to invest in widely held funds, mutual funds, and ETFs.

To bypass Johnson, a discharge petition requires 218 signatures to bring the bill to the floor without his consent. Despite the original bill having 108 cosponsors, as of December 10, the discharge petition initiated by Anna Paulina Luna only has 23 signatures.

Texas Rep. Dan Crenshaw has also opposed prioritizing a ban, telling The Free Press, “This is number 1,000 on my priority list of things to care about.” Although he had one of the highest percentage returns in 2024 at roughly 61.3%, his actual portfolio size was comparatively small. Since entering office, he has only purchased stock valued between $15,000 and $50,000 one time, with his remaining trades falling between $1,000 and $15,000, a relatively negligible amount compared to other members, including Pelosi, who routinely trades tens of millions of dollars of stock per annum.

Crenshaw has argued that banning trading would further limit the ability of non-wealthy individuals to enter Congress, noting that the congressional salary of $174,000 is insufficient, given that members must maintain residences in both Washington, D.C., and their district. “Let’s make Congress a place where only the millionaires can afford to have a job,” he sarcastically argues.

Banning congressional stock trading is overwhelmingly popular among voters. A 2024 YouGov poll found that 77% of Republicans, 73% of Democrats, and 71% of independents support a nationwide ban on trading by elected officials.

Rep. Elise Stefanik says she hopes the discharge petition forces a vote. Explaining her decision to sign, she said, “This bipartisan, commonsense, good governance discharge petition will finally crack down on the corrosive decay of a Congress that is failing the American people.”