Overview
Title
To amend title 5, United States Code, to prohibit insider trading by Members of Congress and their spouses, to amend title 18, United States Code, to extend the length of the post-employment ban on lobbying by Members of Congress, to repeal the automatic adjustment in the pay of Members of Congress, and for other purposes.
ELI5 AI
H.R. 358 is a bill that wants to stop people in Congress from using secret knowledge to get rich with money deals and make them wait longer before they can work as lobbyists after leaving their job. It also says that their pay won't automatically go up anymore.
Summary AI
H.R. 358, known as the "No Corruption in Government Act," seeks to implement several changes affecting Members of Congress. First, it aims to prohibit insider trading by Members of Congress and their spouses by banning them from certain financial dealings, unless held in a blind trust. Second, the bill increases the post-employment lobbying ban for former Senators from two years to six and extends the House of Representatives' ban to three years. Lastly, it repeals the automatic pay adjustments for Members of Congress, meaning their salaries would no longer increase automatically.
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AnalysisAI
Overview of the Proposed Legislation
The bill, titled the "No Corruption in Government Act," aims to implement substantial reforms in the operations and conduct of Members of Congress. This legislative proposal comprises three primary components. First, it seeks to prohibit insider trading by Members of Congress and their spouses. Second, it increases the duration of the post-employment lobbying ban for former Members. Lastly, it aims to eliminate automatic pay raises for Members of Congress.
Key Provisions
- Prohibition of Insider Trading:
- Members of Congress and their spouses would be banned from holding, purchasing, or selling certain financial instruments during their tenure unless these are held in a qualified blind trust.
The bill includes penalties for violating these rules, such as forfeiting profits to the Treasury, disqualification of related losses on taxes, and potential fines.
Extended Lobbying Ban:
- The bill proposes to extend the post-employment lobbying ban—raising it to six years for former Senators and three years for former House members.
Elected officers of the House are also subject to a one-year ban following their service.
Elimination of Automatic Pay Adjustments:
- The legislation would repeal automatic pay raises for Members, with future adjustments determined as provided by law.
Significant Issues
The bill raises several issues worthy of discussion:
- Complex Financial Definitions:
The term "covered financial instrument" is complex and may be challenging for non-experts to navigate.
Potential Loopholes:
The seven-day grace period for new Members of Congress to comply with financial instrument restrictions could be exploited.
Ambiguity in Blind Trusts:
Without a clear definition of what constitutes a "qualified blind trust," this aspect of the bill might create unintentional loopholes.
Extended Lobbying Ban:
While the extended ban aims to prevent undue influence, it might adversely impact the post-Congress careers of former lawmakers.
Uncertainty in Pay Adjustments:
- The removal of automatic adjustments, paired with unclear guidance for future changes, might lead to ambiguity.
Public Impact
The bill, if enacted, could have significant implications for public trust and the financial activities of Members of Congress. By restricting insider trading, the bill may foster greater public confidence in the integrity of Congressional activities. The extended lobbying ban could further reduce perceptions of revolving-door politics, ensuring that former lawmakers do not immediately leverage their governmental connections for lobbying purposes.
Stakeholders
Members of Congress: - Members may find the new rules restrictive, especially regarding financial investments. The prohibition on insider trading and the lack of automatic pay adjustments could be perceived as a threat to their personal financial freedom and growth.
Former Members: - The extension of the lobbying ban could limit professional opportunities for former Members, as it may restrict them from immediately engaging with their network within Congress.
Public: - The general public stands to gain from increased transparency and accountability measures, potentially boosting trust in government institutions. However, ambiguity in the implementation of pay adjustments and compliance verification might raise questions about the effectiveness of the bill.
Ethics and Compliance Departments: - These bodies will face increased responsibilities, particularly in auditing compliance and ensuring that Members adhere to the new standards.
Overall, this bill has the potential to bring about meaningful reforms in Congress. The attention to ethical concerns signals a proactive stance towards minimizing corruption and enhancing public trust. However, the inherent complexities and potential loopholes may require careful consideration to ensure the legislation's objectives are fully realized.
Issues
The lack of clear definitions and the complexity surrounding 'covered financial instrument' in Section 13151 may lead to ambiguity regarding what financial instruments are prohibited, potentially complicating compliance for Members of Congress and their spouses.
The provision in Section 102 allowing Members of Congress a seven-day grace period from the beginning of their term before prohibitions on certain financial instruments apply could lead to manipulation or exploitation, allowing Members to act within this loophole before the prohibition takes effect.
In Section 13152, the absence of detailed enforcement mechanisms and oversight measures for compliance with the prohibition on certain transactions poses a risk of ineffective implementation and enforcement, undermining the bill's intent.
The exceptions for 'qualified blind trust' in Section 13152 without a clear definition of what constitutes such a trust might create loopholes and reduce the effectiveness of prohibiting financial instrument holdings.
There is concern about the increase in the post-employment lobbying ban in Section 202, which extends the ban to 6 years for Senators and 3 years for House Members, potentially impacting former lawmakers' career prospects and drawing controversy over career limitations post-Congress.
The lack of specificity for 'adjusted as provided by law' in Section 301 regarding future pay adjustments for Members of Congress could cause legislative confusion and uncertainty regarding how pay adjustments will be handled after the repeal of automatic adjustments.
The infrequency of audits (every two years) conducted by the supervising ethics office as described in Section 13153 might fail to catch ongoing violations promptly, reducing the effectiveness of compliance monitoring.
There is ambiguity around the effective date of Section 301 tied to the convening of the One Hundred Twentieth Congress, creating uncertainty in the implementation timeline of the automatic pay adjustment repeal.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the act names it the "No Corruption in Government Act," which means this is the official title used to refer to the law.
101. Short title Read Opens in new tab
Summary AI
The section titled "SEC. 101" states that this part of the legislation can be referred to as the "Prohibit Insider Trading Act".
102. Prohibiting transactions and ownership of certain financial instruments by Members of Congress and their spouses Read Opens in new tab
Summary AI
The section of the bill prohibits Members of Congress and their spouses from holding, buying, or selling certain financial instruments while in office, unless those are held in specific blind trusts. Any profits made in violation must be returned to the Treasury, and violations may result in fines or tax penalties. Members must certify compliance with these rules, and compliance will be audited at least every two years.
13151. Definitions Read Opens in new tab
Summary AI
In this section, several key terms are defined: a "covered financial instrument" includes certain investments like securities and commodities, but excludes things like mutual funds and U.S. Treasury bonds; a "Member of Congress" and "supervising ethics office" refer to definitions in another section; and "qualified blind trust" is defined in an additional section.
13152. Prohibition on certain transactions and holdings involving covered financial instruments Read Opens in new tab
Summary AI
Members of Congress and their spouses are not allowed to buy, sell, or hold certain financial instruments during their service, unless those investments are in a blind trust. If they violate this rule, they must give up any money they gained to the Treasury, cannot deduct any related losses on taxes, and could face fines.
13153. Supervising ethics office certification of compliance and audit Read Opens in new tab
Summary AI
Each member of Congress must certify in writing to the ethics office, within seven days of a new session starting, that they and their spouse are following the rules of a specific subchapter. These certifications will be made publicly available online, and the ethics office will audit compliance at least every two years.
201. Short title Read Opens in new tab
Summary AI
The section titled "SEC. 201" of the bill specifies that it can be referred to as the "Ban Members From Lobbying Act."
202. Increase in length of post-employment ban on lobbying of Congress by former Members Read Opens in new tab
Summary AI
The section outlines changes to the lobbying restrictions for former members of Congress, increasing the lobbying ban to six years for former Senators and to three years for former House members. Additionally, former elected officers of the House face a one-year lobbying ban, with penalties specified for violations.
301. Elimination of automatic pay adjustments for Members of Congress Read Opens in new tab
Summary AI
The section eliminates the automatic pay raises for Members of Congress by repealing a specific paragraph of the Legislative Reorganization Act of 1946. It also makes technical changes to the Act and specifies that these changes will take effect when the 120th Congress begins.