Cantor stopped Bachus's insider-trading bill dead in its tracks. | AP Photos Cantor smacks down 'insider' Bachus

A day after Financial Services Committee Chairman Spencer Bachus said he would move forward on an insider-trading bill, House Majority Leader Eric Cantor stopped him dead in his tracks.

In a Wednesday meeting described by one source as “extremely direct” and by another as “very blunt,” Cantor (R-Va.) ripped into Bachus, explaining in no uncertain terms that it was unacceptable for Bachus to mark up the bill without having run it by GOP leaders and other chairmen with jurisdiction over its provisions.


The Alabama Republican abruptly canceled the vote, which was scheduled for next week.

It’s the kind of leadership smackdown that could have repercussions down the road for Bachus, who nearly lost out on the Financial Services gavel last year because of a lack of confidence in his management abilities and who could face a move to oust him in the next Congress. It also underscores the tension between members of Congress over efforts to “clean up” Washington — some worry that a rush to legislate could result in bad laws and others believe that foot-dragging could result in a bad Congress.

Bachus, clearly anxious to create a good-government portfolio in the wake of a “60 Minutes” piece on his stock trades — some of which netted five-figure gains in a single day — put the STOCK Act on the fast track. The bill, written by Democrats Tim Walz (D-Minn.) and Louise Slaughter (D-N.Y.), would make it illegal for elected officials and their aides to make financial transactions while they are in possession of “nonpublic information.”

Cantor delivered the cease-and-desist order on behalf of GOP leaders, other chairmen and rank-and-file lawmakers on both sides of the aisle who were concerned that Bachus could help give the bill life by having the committee approve it. In particular, it put members of the committee in a tough spot: Even if they think the bill’s a bad idea, it’s hard to go home and explain why they voted against it.

For supporters, that’s the plan.

Some committee members are angry with Bachus for putting them on the line to counter criticism that his 2008 trading activity was shady.

“We’re not going to cover Spencer’s ass by passing a half-baked bill,” one Republican member of the panel told POLITICO. “Even Barney Frank didn’t pass it in his two terms as chairman and Dem[ocrats] are the lead sponsors. It’s all about Spencer’s bad political position, not the contents of the policy.”

With junior conservatives on the committee champing at the bit to put one of their own in charge in the near future, Bachus is in a tough spot: He can afford neither the bad press from allegations that he tried to benefit financially from his position in the 2008 bailout talks nor the ill will he engendered this week by trying to benefit politically from his position as chairman.

In canceling the planned committee vote, Bachus’s camp made no mention of the earful the he got from Cantor.

“A significant number of members of the committee on both sides of the aisle have indicated a desire for additional time to study this issue before the committee moves forward with the markup that was announced for Dec. 14,” the Wednesday night press release explained. “In addition, the bill has been referred to five other House committees. Therefore, in the interest of crafting the best bill possible that addresses the public’s concern that members of Congress may be trading on nonpublic information, the markup will be re-scheduled after consultation and coordination with the other committees of jurisdiction.”

In other words: My bad, Mr. Leader. Won’t happen again.

And the message to supporters of the bill who were pleasantly surprised to see it getting special attention from Bachus: Just wait till next year — maybe.

Cantor apparently prefers to whack Bachus behind closed doors, as his office offered up a rather understated version of events when asked about the exchange.

“A large group of bipartisan members of the committee felt the legislation was flawed and being recklessly moved solely in response to media pressure,” Cantor spokesman Brad Dayspring said. “Members of both sides of the aisle wanted more time to gather information and develop appropriate alternatives.”

The bill’s supporters are still hoping that public pressure will force Republican leaders to take it up. But if private pressure is any indication, Bachus is being pushed in the other direction.