Bill Overview
Title: Banning Insider Trading in Congress Act
Description: This bill prohibits a Member of Congress or spouse of a Member from holding, purchasing, or selling certain investments. Any profit made in violation of the prohibition must be disgorged to the Treasury and may subject the Member to a civil fine. A loss from a transaction or holding involving a covered financial instrument that is conducted in violation of this bill may not be deducted from the amount of income tax owed by the applicable Member or spouse. The bill also requires each Member to submit an annual certification of compliance and requires the Government Accountability Office to conduct a compliance audit. The prohibition does not apply to assets held in a qualified blind trust or to a sale by a Member or spouse within 180 days after the bill is enacted or within 180 days after the Member commences service, for any Member who commences service after the bill is enacted.
Sponsors: Rep. Hartzler, Vicky [R-MO-4]
Target Audience
Population: Members of Congress and their spouses
Estimated Size: 1100
- The bill directly affects Members of Congress and their spouses by prohibiting them from holding, purchasing, or selling certain investments.
- There are 535 Members of Congress, consisting of 100 Senators and 435 Representatives.
- Assuming each Member of Congress has one spouse, this potentially accounts for 1,070 individuals directly impacted.
- The prohibition extends to Members of Congress and their spouses' financial dealings, requiring annual compliance certification.
- Indirectly, the bill could impact the general public by increasing trust in the integrity of elected officials and potentially affecting financial markets if the behavior of a significant group of investors changes.
- It may set a precedent for ethics and financial transparency that could influence state and local legislation or corporate governance.
Reasoning
- The policy directly targets Members of Congress and their spouses, amounting to approximately 1,070 individuals given 535 Members.
- We expect the policy to mostly affect those in political roles at the federal level and their immediate spouses, not the general public directly.
- Well-being impacts would likely stem from increased regulatory pressure or loss of financial flexibility for those directly targeted.
- The general public may perceive an indirect benefit in terms of increased trust in the legislative body, potentially affecting their perception of financial markets or governance.
- Overall costs are constrained by the budget specified, so large audits and extensive compliance checks may involve significant investments.
- Considerations around transparency and ethical governance are key elements that this policy aims to address by setting precedents.
Simulated Interviews
Senator (Washington, D.C.)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- I believe this bill is necessary to maintain public trust.
- Ethical standards in our role should be beyond reproach.
- Losing personal investment flexibility is a sacrifice I'm willing to make for greater legislative accountability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 7 | 9 |
| Year 20 | 6 | 8 |
Spouse of a Representative (California)
Age: 50 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This policy feels restrictive since investment is part of our family's financial strategy.
- I worry about the compliance burden.
- Nonetheless, I understand the rationale for increasing public trust.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 7 | 9 |
Representative (Ohio)
Age: 62 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 2/20
Statement of Opinion:
- I have always advocated for transparency in financial dealings in Congress.
- I believe this bill will have a positive long-term effect on our integrity.
- There's little personal financial impact as I've divested most holdings beforehand.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Congressman (New York)
Age: 39 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 3/20
Statement of Opinion:
- This bill complicates the way I manage my finances, as I come from a family that trades actively.
- I understand the need for transparency but hope there might be exceptions that consider personal circumstances.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 6 |
| Year 5 | 5 | 7 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 8 |
Businesswoman and spouse of a Senator (Texas)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 6.0 years
Commonness: 3/20
Statement of Opinion:
- It's a challenging adjustment as my business is closely tied to investment strategies.
- However, my support for my husband's role means we should abide by such regulations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Retired Congressman (Florida)
Age: 68 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 1/20
Statement of Opinion:
- I've always believed in ethical accountability and fought for similar legislation during my career.
- I view this bill as a step forward in restoring public trust in governance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Public school teacher, spouse of a state senator (Illinois)
Age: 55 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- While I am not directly affected, I do worry about how these changes might influence state legislation in the future.
- The balance between regulation and personal finance freedom is important.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Real estate investor and spouse of a Congressman (North Carolina)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- This bill feels limiting to my investment activities.
- While I agree with the policy's intent, it does pose some financial inconvenience to our family.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 9 |
| Year 10 | 7 | 9 |
| Year 20 | 7 | 9 |
Ethics and Compliance Officer for a Congressman's office (New Jersey)
Age: 47 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 4/20
Statement of Opinion:
- I think this is a needed policy to strengthen public trust.
- It adds to my workload in terms of ensuring compliance, but it's worth it for broader transparency.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 7 |
Congressional aide (Arkansas)
Age: 31 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 5/20
Statement of Opinion:
- This policy is going to bring more scrutiny to our office's processes, which I see as both a challenge and an opportunity.
- It's important to streamline how we report and maintain transparency.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 7 |
Cost Estimates
Year 1: $15000000 (Low: $12000000, High: $18000000)
Year 2: $12000000 (Low: $10000000, High: $15000000)
Year 3: $12000000 (Low: $10000000, High: $15000000)
Year 5: $13000000 (Low: $11000000, High: $16000000)
Year 10: $13500000 (Low: $12000000, High: $17000000)
Year 100: $20000000 (Low: $15000000, High: $25000000)
Key Considerations
- The enforcement mechanism needs to be robust to effectively ensure compliance and legitimacy.
- There is potential for Members of Congress to find alternative methods to leverage their insider knowledge without directly violating the new policy.
- The policy assumes a degree of trust in self-reporting, highlighting the importance of efficient audits.