Citing multiple sources, Punchbowl said the ban will be levied on lawmakers, their spouses, and senior staff members.
Members of Congress would be obliged to either divest their investment portfolios or put their assets in a qualified blind trust. Additionally, the proposed legislation would allow them to hold mutual funds.
“We’re almost ready to move forward on this,” House Administration Committee Chair Zoe Lofgren told Punchbowl.
More details about the framework would be released by Democrat leaders in early August.
Why are Democrats banning lawmakers from stock trading?
The aim is to introduce legislation to move through Congress in September, as per Punchbowl’s report. However, it’s unclear if 60 votes would be in favor of the bill.
The Democrats’ decision to ban stock trading by lawmakers comes after it raised concerns. Lawmakers are not subject to insider trading laws given their close connection to stock performance and legislative efforts to boost the economy.
The move has its own set of challenges. If Congress forces lawmakers to put their assets in trusts, they would likely have to employ more staff to approve the trusts.
To prohibit spouses of lawmakers from stock trading would be difficult, especially for members married to those in investment and finance jobs.
Stock trading by lawmakers has become a huge controversial issue in recent years. Both Republicans and Democrats have backed a ban on trading in publicly traded equities. Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer have supported the effort to prevent stock trading.
Nancy Pelosi’s husband sold NVIDIA stock
Nancy Pelosi, who opposed trading on Capitol Hill, exercised millions in call options in big-name stocks in June. Nancy’s husband Paul sold $5 million worth of NVIDIA stock, according to a congressional financial disclosure filed by the speaker.
Paul incurred a total loss of $341,365 by selling the shares. The “questionable” trade was made one day before Congress passed the $54 billion bill. The couple has formerly faced significant criticism from the right about the timing of Paul’s NVIDIA investments.