What to know about Trump's sovereign wealth fund proposal
Add Axios as your preferred source to
see more of our stories on Google.
Photo: Chip Somodevilla/Getty Images
President Trump signed an executive order Monday calling for the creation of a sovereign wealth fund, essentially a federally owned investment vehicle that takes stakes in different kinds of financial assets.
Why it matters: It's unclear where the money would come from to start a fund, and it would require Congressional approval — a tough prospect, given the fund would potentially be a way to cut lawmakers out of a key funding stream.
What they're saying: The administration was vague on details.
- "I think it's about time that this country had a sovereign wealth fund," Trump said from the Oval Office. "I think in a short period of time, we'd have one of the biggest funds."
- Treasury Secretary Scott Bessent said "we're going to stand this thing up within the next 12 months."
- "We are going to monetize the asset side of the U.S. balance sheet for the American people," he added, though did not elaborate.
- Trump mentioned that "we're going to be doing something perhaps with TikTok, and perhaps not." He has previously spoken of the U.S. government potentially being involved with a sale of the social media app.
Zoom in: Sovereign wealth funds are common in oil-rich, typically non-Western countries that run budget and/or trade surpluses.
- The U.S. has only run a budget surplus four times in the last 50 years, per federal data, most recently in 2001.
- The largest sovereign wealth funds are in Norway, China, Abu Dhabi and Singapore.
How it works: These funds typically run outside of the central bank's or finance minister's purview to keep it insulated from politics, per a recent analysis.
- The Biden White House had also been looking into creating one of these funds, but it appeared the goal was to put money into investments in the national security interests — including technology, energy and supply chain.
- Trump first floated this idea during his campaign.
Between the lines: Creating such a fund would take Congressional approval — but, as the NYT pointed out last year, lawmakers would be skeptical about creating a fund that could circumvent their own power to approve federal spending.
Editor's Note: This story has been updated with comments by President Trump.
