The various bills being floated to ban congressional trading of stock have been in the news a lot lately. There’s a problem both with the legislation and the surrounding narrative.

With the former, the issue is that it doesn’t actually do that much that’s new. With the latter, it’s the proposals are actually treated as a sweeping solution to the problem of members of Congress buying and selling stocks.

Since there are a number of bills being proposed (with varying degrees of strictness), let’s focus on the definition most likely to actually pass. This proposal would ban U.S. senators and representatives, their spouses and dependent children — that is, those claimed as such on tax returns — from buying and selling stocks. It does not cover immediate relatives who are adults. A U.S. senator’s son, or father, could still run a multibillion-dollar hedge fund.

Even if expanding the definition had bipartisan support, it would be legally challenging to restrict the economic activities of adults because of their relationship to members of Congress. Just think of someone who works for an investment firm and their estranged sibling runs for, or serves in, Congress. Should they have to divest their entire portfolio because of a familial relationship from which they draw no benefit? Of course not, and it would instantly fall apart in court. 

It also doesn’t ban insider trading, or the sharing of insider information, by members of Congress because that’s already illegal. That was addressed by the STOCK Act, passed in 2012. Remember the accusations that members of Congress made trades based on classified briefings right when COVID was beginning? That was already illegal; it’s just difficult to prosecute. That’s why there were never any charges after the COVID trades, not because of the law.

The proposed bans also don’t apply to other people who are very close to members. That includes mistresses — which, of course, typically isn’t public knowledge — but also college roommates, lawyers, golf buddies, uncles, you name it.

Again, a member of Congress already can’t pass along insider information to any of these people, so a sweeping ban on them is both unnecessary and legally untenable. Just like with the COVID trades, it’s already illegal for a member of Congress to share insider information with any of those people; it’s just difficult to prove. 

None of this is to say that the STOCK Act, or laws against insider trading in general, are worthless; they’re good to have in place, to be sure. Just having them in place doesn’t mean it’s easy to enforce them, however, or that they’re going to magically solve the problem. The ban on congressional trading is of a similar variety, but it’s also so specifically and narrowly tailored that it’s easy for people to get around.

Say, for instance, a member of Congress is married to a hedge fund manager or someone who works at a major investment firm. If this bill passed, would they immediately have to quit their job? Nope. They’d simply have to personally stop buying and selling stocks and put all of their assets in a blind trust, meaning that their money is professionally managed for them without their input. They could continue to manage the assets of others and, depending on the particular language of both the legislation and their employment contract, even continue to collect fees to do so. In certain cases, they might have to shift their role. That’s it.

In the future, if a congressional candidate were romantically involved with someone like that there’s an even simpler solution: Don’t get married. This legislation doesn’t apply to someone who’s been a public romantic partner, but isn’t married, because there’s no legal definition of that. Similarly, when it comes to children, if your 16-year-old son is a math prodigy who wants to have an e-Trade portfolio, just stop claiming him as a dependent on taxes.

These proposals also do not cover the president, vice president or the executive branch, nor do they cover congressional staff. Those people can have just as much access to inside information, or more, as members of Congress. That’s not a reason to oppose this pending legislation, however: they could be covered by future proposals.

Banning members of Congress and their spouses or dependent children from owning stocks isn’t a sweeping solution, but it’s a good start. There’s no real reason to oppose it, and hopefully Maine’s delegation will unite in support of some version of it.