Congress Cleans House: New Bill Bans Stock Trading for Members, Spouses, and Dependents

The "Bipartisan Restoring Faith in Government Act" is doing exactly what it says on the tin: It's trying to make people trust Congress again. And how? By tackling the sticky issue of lawmakers and their families potentially profiting from insider knowledge. This bill straight-up prohibits members of Congress, their spouses, and their dependents from owning or trading individual stocks, commodities, futures, and other similar investments. Think of it like this: no more playing the stock market with privileged information.

Trading Privileges Revoked

The core of the bill revolves around preventing conflicts of interest. It forces lawmakers and their families to either sell off their prohibited investments or put them into a qualified blind trust within 90 days of the law's start date, or 90 days of becoming a covered individual, such as newly elected representatives. A "qualified" blind trust means the trustee managing the assets can't have any close personal or professional ties to the lawmaker, and they can't share any info about the holdings. The trustee will also be required to divest the assets within 6 months. This is to ensure that those in power aren't making financial decisions based on information they gained through their positions.

So, what can they invest in? The bill makes exceptions for things like widely-held mutual funds, Treasury bills, and state/local government bonds – basically, investments that are less susceptible to insider knowledge. If a farmer in Iowa buys into a broad mutual fund, it's not the same as a senator potentially influencing specific company stock prices, right?

Real-World Stakes

Imagine a member of Congress on a committee overseeing the pharmaceutical industry. Under the current rules, they could theoretically buy stock in a drug company before announcing a major policy change that benefits that company. This bill aims to shut that down. The impact? Hopefully, fewer chances for those in power to game the system. The bill even specifies in SEC. 2. that any losses incurred from prohibited trades can't be deducted on their taxes – a financial penalty on top of potential legal trouble.

Accountability and Consequences

This isn't just about rules; it's about enforcement. The bill requires members to sign a compliance pledge and provide detailed information to their ethics office, which will then issue a public certificate of compliance. If someone willfully breaks the rules, the ethics office is required to refer the case to the Attorney General, who can bring a civil action with penalties up to $50,000 (SEC. 2.). And, no, they can't use their office expense accounts or campaign funds to pay those fines. One interesting wrinkle: The bill amends the tax code (SEC. 2.) to allow deferred capital gains taxes on assets that have to be sold off – a bit of a financial cushion for those affected.

Blind Trust, But Really Blind?

While the bill aims for transparency and accountability, there are practical points to consider. For instance, how truly "blind" will these trusts be? The bill lays out specific requirements for trustees (SEC. 2.), but there's always the potential for loopholes or workarounds. Also, tracking compliance across all covered individuals and their investments will be a significant task for the ethics offices. Finally, while the penalties are substantial, delayed enforcement or weak prosecution could undermine the bill's intent.