Key Points
- The HONEST Act would ban stock trading by members of Congress, the president, and vice president, but exempts Donald Trump and JD Vance during their current terms.
- The bill advanced out of committee with only one Republican voting yes, amid internal GOP criticism and claims of rushed legislation.
- Lawmakers and their families would be required to divest most financial holdings, though carveouts exist for mutual funds, Treasury securities, and certain family-owned assets.
A Senate committee has moved forward with a bill to prohibit lawmakers and top executive officials from trading stocks while in office. The legislation, named the HONEST Act (Halting Ownership and Non-Ethical Stock Transactions), passed through the Senate Homeland Security and Governmental Affairs Committee, with support from all Democrats and just one Republican: Senator Josh Hawley of Missouri.
The bill would bar members of Congress, the president, and the vice president from buying or selling individual stocks. It also mandates divestment of most financial holdings within 90 days of the law taking effect, with a few exceptions. But a key provision has raised eyebrows: the ban would not apply to President Donald Trump or Vice President JD Vance during their current terms.
This has raised even more concern of favoritism, and could derail the final passage of the bill.
According to an annual report by Unusual Whales, many members of Congress have beat the stock market at a statistically un-probable rate. In the image below, the dotted yellow line is what the S&P 500 returned in 2024:
How The Stock Trading Ban Would Work
Under the HONEST Act (formally called the PELOSI Act) lawmakers, presidents, vice presidents, and their spouses and dependent children would be required to:
- Stop acquiring assets like individual stocks, options, futures, commodities, and digital assets as soon as the law is enacted.
- Sell off these investments within 90 days of the start of their next term in office.
- Move existing assets into diversified mutual funds, exchange-traded funds (ETFS), or U.S. Treasury securities.
The bill also strengthens enforcement by increasing STOCK Act violation fines from $200 to $500. It requires public reporting of exemptions, blind trust dissolutions, and even financial benefits received from the federal government by lawmakers or their family members.
Certain types of investments, like retirement funds, municipal bonds, and holdings in small businesses without conflicts of interest, are excluded from the divestment requirement.
Trump And Vance Are Exempt
The revised bill carves out a delay for the current president and vice president. Although future officeholders would be subject to the full ban, Trump and Vance would not need to sell their existing holdings until after they leave office or begin a new term.
Trump, speaking at a press conference, offered only general approval. “I like it conceptually,” he said. “I think that’s disgraceful what Pelosi did, and I like this in that sense. But I’d have to study it more.”
GOP Resistance
Despite introducing the original legislation under the name PELOSI Act, Hawley found himself the lone Republican in support of the final version. Many of his GOP colleagues attacked the bill as rushed, unfair to wealthy lawmakers, and a deterrent to public service.
“I don’t know when in this country it became a negative to make money,” said Senator Rick Scott (R-Fla.), who argued the legislation unfairly targets successful individuals.
Hawley dismissed the criticism. “They don’t want to ban stock trading,” he told reporters. “I just think that’s a mistake.”
The division highlights the political complexity of banning member trading. While polling suggests broad public support for such measures, congressional self-policing has been limited. Nancy Pelosi has garnered a lot of press over the years for her record investment performance. General Americans are concerned.
What Happens Next
The bill now heads to the full Senate, where its path remains uncertain. While several Democrats have voiced support, unified Republican opposition could stall its progress unless the carveouts and exemptions are preserved.
Meanwhile, House Republicans are pushing their own versions of a trading ban, though none currently include the president or vice president.
Despite the political wrangling, the bill’s core idea, that those in power should not profit from information the public doesn’t have, continues to resonate across party lines. Whether it becomes law, and whether it applies equally, remains to be seen.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
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