Jason Zweig at Total Return notes that it will be the American taxpayers who foot the bill to track the trades of Congressmen per the soon to be enacted STOCK Act. Zweig links to a piece by Paul Bedard at the Washington Examiner that looks at the estimates to a set-up and run a system to track their trades. Bedard writes:
House Clerk Karen Hass, citing Congressional Budget Office calculations, said that it will cost a total of $4 million for computers and software needed to set up a House-Senate system to track congressional Wall Street trading, and another $1 million a year to manage it.
Last week, the Senate put a price on their piece of the project at $1.5 million to build the system and $200,000 a year to manage it. Secrets reported those numbers Monday. The difference is likely because the House has 435 members, the Senate just 100.
So let’s do some math. Adding up the costs across both the House and Senate shows $5.5 million ($4m + $1m) set-up costs and $1.2 million ($1.0m +$0.2) per year in ongoing fees. If we amortize the cost of the systems over five years we get $11.5 million in total costs. Spread that over 535 member of Congress we get a tracking cost of $4,299 per Congressmen per year. If we amortize the set-up costs over 10 years and assume no inflation in annual costs we get $3,271 per Congressmen per year.
First off, why the House and Senate need different systems is beyond me. Second, either way these costs seems way too high. The fact is that portfolio tracking tools are already available online and often for free. A custom version for Congress could be set up for far less than what is contemplated in the STOCK Act. Leigh Drogen recently tweeted:
Really congress, 3K/year/congressman to track their stock holdings? You couldn’t sign everyone up for a free @covestor account, idiots.
Zweig notes that the STOCK Act doesn’t ban trading by Congressmen but only places some limits on it. Zweig writes:
From now on, however, the American taxpayer will foot an even bigger bill to track whatever trades are still being made in the halls of Congress…Why is it that whenever Congress says, “The check, please,” the bill always gets handed to someone else?
In short, Congress trades, you pay.