New GOP Bill Bans Congressional Stock Trading

House GOP leadership is backing a new bill to ban stock trading by members of Congress. The legislation, sponsored by Rep. Bryan Steil, would prevent lawmakers, their spouses, and dependent children from buying new stocks. It also requires at least seven days' notice for any stock sales.

Despite the ban on new purchases, the bill allows lawmakers to hold onto existing stock holdings. This provision aligns with statements from House Speaker Mike Johnson, who previously suggested that forcing divestment could deter financially successful individuals from running for office. The bill also permits trading in diversified funds such as mutual funds and ETFs.

Violators of the new law would face a penalty of $2,000 or 10% of the transaction value, whichever is higher. While the bill aims to address concerns about insider trading, it may not fully quiet public concerns regarding conflicts of interest. The proposal comes as a separate effort by Rep. Anna Paulina Luna seeks to force a vote on a stricter ban that would require full divestment.

The proposed legislation, set to be introduced by Republican Rep. Bryan Steil of Wisconsin, targets stock trading by members of Congress and their families. The bill aims to prevent lawmakers from profiting off non-public information while serving in office.

Key restrictions included in the bill are:

• A ban on buying new individual stocks for members of Congress, their spouses, and dependent children.
• A requirement to disclose stock sales at least seven days in advance.
• Permission to retain existing individual stock holdings without forced divestment.
• Continued allowance for trading in diversified funds, such as mutual funds and ETFs.

Penalties for violating these rules would be significant. The fine would be set at $2,000 or 10% of the value of the transaction, whichever amount is higher. While the bill addresses the purchase of new stocks, the ability to maintain current portfolios has drawn scrutiny regarding potential conflicts of interest.

Support from House GOP leadership focuses on balancing transparency with recruitment. Speaker Mike Johnson has previously argued that requiring lawmakers to sell off their stocks could discourage capable individuals from seeking public office.

Johnson stated, "You don't want another deterrence for good people running for office." He also commented on the broader goals of the legislation, telling the Wall Street Journal, "No member of Congress should be allowed to profit from insider information, and this legislation represents an important step in our efforts to restore the people's faith and trust in Congress."

Rep. Bryan Steil, who chairs the Committee on House Administration, emphasized the need for transparency. In a video announcing the bill, Steil said, "The American people deserve to know that their members of Congress is not profiting off of insider information." He added, "If you want to day trade, go to Wall Street."

House Majority Leader Steve Scalise indicated plans to advance the bill. He stated he would "like to move this bill for a full House vote" once it clears the House Administration Committee, which Steil chairs.

The new GOP-backed bill arrives amidst competing legislative efforts. It follows an initiative by Rep. Anna Paulina Luna of Florida to force a vote on a separate stock trading ban. Luna's proposal differs significantly from Steil's bill because it would force members of Congress to fully divest their individual stock holdings.

Some top Democrats have expressed reservations about Luna's proposal. Their primary objection is that it does not include restrictions on stock trading by the President and Vice President. It remains unclear whether Democrats will support the new GOP-backed proposal that allows lawmakers to keep existing stocks.

Meanwhile, action in the Senate offers another path forward. A bipartisan group in the Senate passed a stock trading ban bill out of committee in July. Notably, the Senate bill includes restrictions on the President and Vice President. However, that bill has yet to receive a floor vote.