WASHINGTON -- House Democrats are circulating a resolution accusing House Majority Leader Eric Cantor (R-Va.) of having a conflict of interest in the debt ceiling debate, a move that could provide an awkward C-SPAN moment for one of the lead Republicans in the budget negotiations.
The resolution goes after Cantor's investment in ProShares Trust Ultrashort 20+ Year Treasury ETF, a fund that "takes a short position in long-dated government bonds."
The fund is essentially a bet against U.S. government bonds. If the debt ceiling is not raised and the United States defaults on its debts, the value of Cantor's fund would likely increase.
The Democratic resolution, obtained by The Huffington Post from a Democratic source on the Hill, argues that Cantor "stands to profit from U.S. treasury default, which thereby raises the appearance of a conflict of interest," and that he "may be sabotaging [debt ceiling] negotiations for his own personal gain." It's not clear how widely the measure was being circulated, with a House Democratic aide saying they hadn't seen the resolution or heard it being discussed.
"Majority Leader Cantor has compromised the dignity and integrity of the Members of the House by raising the appearance of a conflict of interest in negotiations with the executive branch over raising the debt ceiling," adds the measure.
Cantor spokesman Brad Dayspring said Democrats have it backwards: The Majority Leader stands to lose much more money if Congress does not reach a deal on the debt ceiling and the U.S. defaults.
According to Dayspring, Cantor owns $3,327 in the ProShares trust. His congressional pension in the Thrift Savings Plan, on the other hand, is invested in the G Fund of government bonds and is valued at over $263,000. The value of his investment in the ProShares fund is highly variable and could change significantly if the government defaults.
"For the conspiracy theorists -- they would have to believe that Eric would want to lose hundreds of thousands of dollars to make a few thousands in return," said Dayspring. "Putting aside the lunacy of it all, he would lose hundreds of thousands of dollars if he did what they suggest."
"The insinuation is so outrageous that it shows a fundamental lack of understanding about how the markets work, how the U.S. economy works," he added. "Any member of Congress who would seriously identify themselves with this would reveal a complete inability to understand the United States economy and basic investing."
The resolution is a question of privilege, which deals with the rights, dignity, safety and integrity of the proceedings of the House of Representatives. It has direct access to the floor, meaning that at any time, a lawmaker can rise and question the privileges of the House and offer a resolution. It must then be read in its entirety, as soon as it is presented.
The resolution is unlikely to be ruled valid by the parliamentarian, but it could certainly create an uncomfortable bit of political theater when it's read.
"Given the language in this resolution, obviously that would be incendiary, if you chose the right moment," said a House Democratic aide who added that right now, it appeared the party was still shopping around for a member willing to put it on the floor.
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