On Wednesday, a key Senate panel approved a bill that would ban lawmakers from trading stocks.
The Senate Homeland Security and Government Affairs Committee approved the legislation — known as the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act — by an 8-4 vote.
Republican Sens. Rand Paul of Kentucky, Ron Johnson of Wisconsin, Mitt Romney of Utah, and James Lankford of Oklahoma voted against it.
“The public doesn’t think we should profit from having information that they don’t have, and we shouldn’t” Democratic Sen. Jeff Merkley of Oregon, one of the key sponsors of the bill, told reporters in his office on Tuesday.
Polling has shown for years that the idea of banning lawmakers from trading stocks in broadly popular among members of both parties. Several lawmakers have even campaigned on the issue. Yet a vote on legislation to address the public’s concerns has remained elusive.
Wednesday’s Senate committee vote is the most significant progress on the effort in years. Here’s what you should know about the bill.
It’s a sweeping bill — but it wouldn’t take full effect until 2027
Under this bill, members of Congress — along with the President and Vice President — would be banned from purchasing stocks and cryptocurrencies beginning 90 days after the bill’s signed into law.
Then, on March 31, 2027 — two and a half years from now — a more complete ban takes place. Those same politicians, as well as their spouses and any dependent children, would have to sell off all of their stocks within 120 days after that.
The reason for that delay is to give lawmakers, particularly those who have large stock portfolios and may not have contemplated a trading ban when they were running for office, plenty of time to comply with the rules. The bill also forbids lawmakers from buying stocks until 90 days after they’ve left office.
The bill also comes with steep fines for politicians who break the law: Either one month’s salary or 10% of the value of each stock, whichever is greater.
Finally, the bill would create a searchable database of lawmakers’ financial holdings more broadly, which are currently only accessible via individual online filings.
The full text of the legislation can be found here.
Lawmakers wouldn’t be able to keep blind trusts
One key difference between this bill and previous proposals is that it doesn’t allow for lawmakers to continue holding stocks via “blind trusts,” which some have criticized as insufficient.
“There’s been a sense that they’re not really blind,” Merkley said. “It’s just easier and more straightforward to say: If you want to serve in the Senate, serve the people, not your portfolio.”
There are still certain assets that lawmakers and their families could continue to hold, such as mutual funds, US Treasury bills, and municipal bonds.
This is the most significant progress on a stock trading ban in years
The last time either chamber got close to passing a stock trading ban was in September 2022, when House Democrats proposed a sweeping bill that included a major loophole and had little time to be vetted by members.
The bill was ultimately yanked after opposition quickly bubbled up. Many saw the effort as a sham designed to appease those who had been pushing for a stock trading ban.
In the years since, Merkley — along with Democratic Sen. Jon Ossoff of Georgia and Josh Hawley of Missouri — worked together to create a new bipartisan bill that fused elements of different pieces of legislation that they had proposed over the years.
The new bill was also sponsored by Democratic Sen. Gary Peters of Michigan, the chairman of the committee.
It’s unclear when the bill would get a vote
Despite the progress represented by Wednesday’s committee vote, it’s unclear when or if the bill will come up for a vote.
Just a few weeks of session remain for the rest of this year, and Senate Majority Leader Chuck Schumer has historically been hesitant to bring up bills that don’t already have enough votes to pass. It’s unclear if that’s the case with this bill.
Merkley told reporters that the bill’s best shot would be to attach it to another must-pass bill — such as government funding legislation — in the form of an amendment.
But he warned that the path ahead would be difficult, given that individual senators can hold up legislation fairly easily in the upper chamber.
“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.”
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