Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Brecca Stoll.
Without support from a single House Democrat, Republican Wisconsin Representative Bryan Steil's
"Stop Insider Trading Act" passed the House Administration Committee and will move on to the House floor for consideration.
If enacted, the bill would restrict members of Congress from buying individual securities and would require notice seven to 14 days before a sale. Lawmakers would be able to continue to buy index and mutual funds, as well as continue investing dividends in previously purchased securities.
Democrats continue to argue that the bill is not strong enough, with many stating that trading should be banned entirely and that lawmakers should be required to fully divest before taking office.
Throughout the two-hour markup, Democratic House reps proposed amendments. Ranking member Rep. Joe Morelle (D-NY) proposed requiring
"Congress and the President and the Vice President" to fully divest. Rep. Julie Johnson (D-TX) offered a similar amendment that would mandate full divestment without providing relief from capital gains taxes.
Steil pushed back, warning that mandatory divestment could discourage qualified candidates from seeking office.
"Under the amendment offered by our colleague from Texas, that [capital gains tax] would obviously continue to apply ... [and] for some people that may be a very significant financial impact," he said.
He added that the financial burden could lead
"some individuals ... to not come to Congress - and not because they did anything wrong, but because they had a successful private sector career."
Chris Josephs, the co-founder of Autopilot, an app that allows average Americans to trade the same stocks Rep. Nancy Pelosi (D-CA) trades, previously voiced the same concerns to The Daily Wire about legislation requiring full divestment.
"I think it would demotivate a major class of successful people from running," Josephs said.
"Businesspeople are successful. They know how to run things. They know how to lead. They know how to hire. They know how to create strategies. They know how to execute on those strategies. We should not just say no to those potential candidates just because they own businesses and they're not gonna sell."
Josephs told The Daily Wire he suspected that the 2024 election would have looked drastically different with full divestments in place.
"The 2024 election, you got Trump and Vance. Vance is an ex-venture capitalist, ex-business guy. He owns a lot of individual stocks that are private. And then you've got Trump, who owns a lot of stuff. On the other side of the ticket, though, you've got Kamala, who's a career-long politician. You've got Tim Walz, who proudly doesn't even own a house. And if that bill were to be passed, just based on how that would work, Trump and Vance wouldn't be allowed to run unless they sold their stuff, which I doubt they would have."
After full-divestment amendments were rejected, Rep. Norma Torres (D-CA) introduced an amendment to prohibit the reinvestment of dividends. Republicans voted it down, keeping dividend reinvestment permissible under the bill.
Steil defended the decision, arguing that dividend payments do not pose the same insider trading risks.
"Those dividends are structured within the company with advanced notice, outside of the control of any given member. It doesn't carry the risk of insider trading," he said.
"Because it doesn't carry the risk of insider trading, what we allowed for was the reinvestment of dividends."
He later emphasized the bill's intent, saying,
"The focus here is to prevent members from being able to profit off of insider information - not to make elected officials poor."
poll#201
