A coalition of top Democratic lawmakers is moving to strip presidents and vice presidents of their ability to collect settlement payments from federal agencies, targeting what they call a loophole that could allow sitting leaders to profit from litigation against their own government.
The legislation, formally titled the "Ban Presidential Plunder of Taxpayer Funds Act," will be introduced Wednesday across both chambers of Congress. Sponsors include Sen. Elizabeth Warren of Massachusetts, Senate Minority Leader Chuck Schumer of New York, and Reps. Jamie Raskin of Maryland and David Min of California.
The bill is a direct response to President Trump's $10 billion lawsuit against the IRS and Treasury Department over the disclosure of his tax returns and those of his sons and company to news outlets. Though Trump said he would donate any settlement proceeds to charity, Democrats argue that any recovery would ultimately be taxpayer money flowing into a president's coffers.
"While American families are getting flattened by skyrocketing costs, Donald Trump is trying to snatch up billions of taxpayer dollars to line his own pockets and settle personal scores," Warren said in a statement. "My bill will close the loopholes that enable this apparent corruption and ban Trump and all future Presidents and Vice Presidents from abusing their power and stealing Americans' hard-earned money."
The proposal would prohibit presidents, vice presidents, their spouses, children, and any trusts or entities under their control from collecting settlement payments. The only exception would come if a federal judge appoints an independent counsel to represent the government and orders proceedings made public before any compensatory damages are awarded.
Former presidents and vice presidents would face similar restrictions, with settlements barred unless no presidential or vice-presidential appointees were involved in the underlying claim and all payment details are disclosed publicly and reported to Congress.
This is not the first attempt to close such pathways. In February, Sen. Ron Wyden, D-Oregon, introduced separate legislation that would slap a 100% tax on any settlement damages a president or vice president receives from the federal government, effectively eliminating any profit. That measure has not advanced to a Senate vote.
Trump previously acknowledged pursuing legal action against the Justice Department, telling reporters, "I guess they owe me a lot of money." The new Democratic bill reflects growing concern that without explicit restrictions, a sitting president could use the settlement process to extract substantial sums from taxpayers while nominally using the courts to resolve disputes.
Author Sarah Mitchell: "This is less about Trump than about establishing guardrails that should have existed from day one, but the timing tells you everything about why Democrats suddenly care."
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