WASHINGTON (Diya TV) – A key Senate panel approved a bill on Wednesday that would ban lawmakers from trading stocks. The Senate Homeland Security and Government Affairs Committee passed the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act with an 8-4 vote.
Republican Senators Rand Paul, Ron Johnson, Mitt Romney, and James Lankford voted against the bill.
“The public doesn’t think we should profit from information they don’t have, and we shouldn’t,” Democratic Senator Jeff Merkley, a key sponsor of the bill, told reporters on Tuesday.
Polls have shown broad bipartisan support for banning lawmakers from trading stocks, with several lawmakers even campaigning on the issue. However, votes on such legislation have been elusive until now. Wednesday’s Senate committee vote marks significant progress.
The ETHICS Act would ban members of Congress, the President, and the Vice President from purchasing stocks and cryptocurrencies starting 90 days after the bill’s enactment. By March 31, 2027, a complete ban will take effect, requiring these politicians, their spouses, and dependent children to sell all stocks within 120 days.
The delay aims to give lawmakers, especially those with large stock portfolios, time to comply with the new rules. The bill also prohibits lawmakers from buying stocks until 90 days after leaving office.
Violating the law would result in steep fines: either one month’s salary or 10% of the stock’s value, whichever is greater. Additionally, the bill mandates creating a searchable database of lawmakers’ financial holdings, which are currently only accessible through individual online filings.
Unlike previous proposals, this bill does not allow lawmakers to hold stocks via “blind trusts,” which have faced criticism for being ineffective. “It’s just easier and more straightforward to say: If you want to serve in the Senate, serve the people, not your portfolio,” Merkley said.
Lawmakers and their families could still hold assets such as mutual funds, US Treasury bills, and municipal bonds.
The most recent attempt to pass a stock trading ban came in September 2022 when House Democrats proposed a sweeping bill that ultimately failed due to a major loophole and insufficient vetting time.
Since then, Senators Merkley, Jon Ossoff, and Josh Hawley have worked together on a new bipartisan bill, combining elements from their previous proposals. Democratic Senator Gary Peters, chairman of the committee, also sponsored the bill.
Despite Wednesday’s progress, the bill’s future remains uncertain. Only a few weeks of the session remain this year, and Senate Majority Leader Chuck Schumer has historically avoided bringing up bills without enough votes to pass. Merkley suggested attaching the bill to must-pass legislation, such as government funding, but acknowledged the challenges ahead.
“One person out of 100 can stop us from getting a debate on this,” Merkley said. “I am hoping we will have a bill where there’s enough momentum for critical amendments to be heard, that I can force a vote on this.”
A bipartisan group of Senators unveiled the new proposal, which bans members of Congress, their spouses, and dependent children from trading individual stocks. Senators Jeff Merkley, Gary Peters, Jon Ossoff, and Josh Hawley outlined the ETHICS Act, with Peters pledging to take up the bill in his committee.
Merkley previewed the proposal in an NPR interview, stating, “If you want to serve in Congress, don’t come here to serve your portfolio, come here to serve the people.” He cited a University of Maryland poll showing 85% of the public supports banning stock trading by members of Congress.
Currently, lawmakers must disclose stock trades over $1,000 within 45 days, but critics argue the system is insufficient and unevenly enforced. The 2012 STOCK Act requires disclosure, but enforcement is weak, with a $200 fine for late reporting.
The ETHICS Act would expand penalties, with fines for non-compliance being either the value of a lawmaker’s monthly salary or 10% of the asset’s value, whichever is greater.
The proposal would require lawmakers to divest from individual assets by March 31, 2027, and would cover new members elected after the bill’s passage. Lawmakers would have 120 days to sell off covered investments. The bill also includes a 90-day cooling-off period for former lawmakers before they can invest in individual stocks again.
The Senate proposal also increases the penalty for non-reporting to $500 and mandates that all disclosures be in a searchable public database. This move aims to enhance transparency and address public distrust.
