Bill of the Month — February 2022: Bipartisan Ban on Congressional Stock Ownership Act

The Taxpayers Protection Alliance (TPA) is proud to announce a new initiative, the Bill of the Month (BOTM).  The BOTM is meant to highlight congressional efforts that help taxpayers and consumers.  The BOTM for February is S. 3631, the Bipartisan Ban on Congressional Stock Ownership Act, introduced by Sens. Elizabeth Warren (D-Mass.) and Steve Daines (R-Mont.), as well as its House companion (H.R. 6678) introduced by Reps. Pramila Jayapal (D-Wash.) and Matt Rosendale (R-Mont.). The bill would – as its name suggests – prevent members of Congress from engaging in investment activities, which present clear conflicts of interest.

Members of Congress have a unique ability to influence the direction of the American economy and the global stock market. As such, they also possess the tremendous ability to vote in accordance with what’s best for their personal stock portfolios, rather than what’s best for the overall economy.

As Sen. Warren said when introducing the bill, “No one should ever have to wonder whether their Member of Congress is working for the public interest or their own financial interest.” The American people should be able to trust that their elected representatives are doing just that – representing them. With members of Congress enriching themselves while in office, this trust cannot exist.

1. 3631 and H.R. 6678 would accomplish a number of objectives. The first is a straightforward ban on members of Congress – and their spouses – from trading individual stocks, bonds, commodities, and other vehicles. It provides a 180-day transition period for members to divest their holdings in these accounts and to get into compliance with the law as written. Any investments by members of Congress must be done in a blind trust or widely-held funds, like mutual funds or ETFs, so long as they are diversified and present no conflicts.

For members who fail to get into compliance, they face a $50,000 fine for each infraction. This would be enforced by the Department of Justice and the U.S. Office of Special Counsel.  There is also a provision that would defer capital gains taxes on the sell-off of these assets because the divestment was forced by law. These are a number of commonsense solutions to restore some measure of trust between the American people and Congress.

These bills are also notable because they represent the first bipartisan effort on this issue. All prior efforts that have resulted in the introduction of actual legislation have been purely partisan. S. 3631 and H.R. 6678 are, in contrast, good faith efforts to actually move forward legitimate accountability measures for members of Congress regardless of party affiliation.

It is long past time something like this got done on Capitol Hill. In the words of Sen. Daines, “Congress is here to serve, not be served. The American people should have faith in that fact. Members shouldn’t be able to make legislative decisions or use their platform and influence to benefit themselves personally, which is why it should be no question that owning and trading stocks should be banned.”

It is for these reasons, among others, that TPA is proud to make the Bipartisan Ban on Congressional Stock Ownership Act its inaugural bill of the month for February 2022.