Purpose:
This policy establishes a fair and transparent standard for the salaries of U.S. government representatives, ensuring compensation aligns with the economic conditions of the constituents they serve. Additionally, it prohibits members of Congress from trading in the stock market to prevent conflicts of interest and uphold public trust in representatives’ commitment to equitable service and impartial decision-making.
Policy Statement:
U.S. Senators and Representatives shall not earn a salary greater than the median household income of the state they represent, and they are prohibited from trading in the stock market while in office. This dual approach aligns representatives’ financial interests with those of their constituents, promotes accountability, and upholds the integrity of public service.
Scope:
This policy applies to all members of the United States Congress, including Senators and Representatives, covering both salary and stock trading activities. The salary cap applies to base salaries and regular compensation, excluding allowances or reimbursements for necessary official duties. Stock trading restrictions include all transactions in public equities, derivatives, and other publicly traded securities.
Policy Details:
1. Salary Cap Determination
• Congressional salaries shall be capped annually at no greater than the median household income of the representative’s state, as determined by the latest U.S. Census Bureau data.
• This cap will be reassessed every fiscal year, with any salary adjustments taking effect at the beginning of the subsequent fiscal year.
2. Compensation Adjustments
• If the median household income of a representative’s state decreases, the representative’s salary will be adjusted downward accordingly at the beginning of the next fiscal year.
• If the median household income increases, the representative’s salary may increase proportionally, up to but not exceeding the state’s median household income.
3. Stock Trading Prohibition
• Representatives are strictly prohibited from trading individual stocks, derivatives, or other publicly traded securities while in office. Any existing holdings must be placed in a blind trust or divested upon taking office to eliminate potential conflicts of interest.
• Investment in diversified mutual funds or index funds is permitted, as these are considered to carry minimal conflict risk.
• Representatives found engaging in prohibited stock trading shall be subject to disciplinary actions, including fines, censure, or expulsion from Congress, as determined by the Office of Congressional Ethics (OCE).
4. Transparency and Reporting
• Each representative’s adjusted salary and investment disclosures shall be publicly available on official government websites for transparency.
• An annual report detailing median household incomes, corresponding representative salaries, and compliance with trading restrictions will be provided to Congress.
5. Exemptions and Allowances
• Representatives may still receive cost-of-living allowances, travel reimbursements, and funds for office expenses essential to their duties.
• This policy does not restrict any income earned independently outside their role, provided it complies with applicable ethics and conflict-of-interest regulations.
6. Oversight and Enforcement
• The Office of Congressional Ethics (OCE) shall oversee and enforce compliance with this policy. Representatives found to be circumventing or violating salary caps or trading prohibitions will face disciplinary actions, including salary withholding, fines, and other penalties.
Rationale:
This policy ensures representatives remain economically and ethically aligned with the constituents they serve, reducing financial disparities and minimizing conflicts of interest. By capping salaries and prohibiting stock trading, this policy fosters public trust and reflects a commitment to serving the American people without personal financial motivations.
Effective Date:
This policy will take effect on [EFFECTIVE DATE TBD] and apply to all U.S. government representatives serving on or after this date.