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Given all of the activity originating from the U.S. Office of the President since the start of President Trump's 2nd Administration, it would not be surprising that n 3 February 2025 President Trump issued an Executive Order call for the creation of a Federal Sovereign Wealth Fund (USFSWF). The text of the Executive may be accessed as A Plan for Establishing a United States Sovereign Wealth Fund.
In the Fact Sheet: President Donald J. Trump Orders Plan for a United States Sovereign Wealth Fund issued with the Executive Order the President ordered the delivery of a plan for the constitution of a federal SWF within 90 days of the date of the Order. Its object is "stewardship of our national wealth." Not just that; the object is to generate long term wealth.
“I think in a short period of time, we’d have one of the biggest funds,” Trump said during the signing ceremony, noting that some countries such as Saudi Arabia have large funds but saying that the United States could eventually catch up. Saudi Arabia’s Public Investment Fund is worth about $925 billion. (What is a sovereign wealth fund? Explaining Trump’s executive order; see also reporting here)
This is consistent with fundamental operating principles of SWFs. It will be interesting, and one can hope that like many of the other SWFs, the U.S. Federal Sovereign Wealth Fund (USFSWF) will conform generally to the Santiago Principles to "promote transparency, good governance, accountability and prudent investment practices whilst encouraging a more open dialogue and deeper understanding of SWF activities" even as they advance U.S. interests in the public and private financial sectors. It is unlikely that the United States will join the International Forum of Sovereign Wealth Funds (IFSWF). But then again neither is Norway--though it supports the work of the IFSWF. And, of course, the instrumental use of the USFSWF to further U.S. interests ought not to be discounted. The real question will be the ability to align the fulfillment of those interests with the fundamental wealth enhancing purpose of the fund. For my discussion of other models, see here, here, here, here, here, and here.
The "Fact Sheet: President Donald J. Trump Orders Plan for a United States Sovereign Wealth Fund "and "A Plan for Establishing a United States Sovereign Wealth Fund" follow below.
A Plan For Establishing A United States Sovereign Wealth Fund
By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to promote the long-term financial health and international leadership of the United States, it is hereby ordered:
Section 1. Policy and Purpose. It is the policy of the United States to maximize the stewardship of our national wealth for the sole benefit of American citizens. To this end, it is in the interest of the American people that the Federal Government establish a sovereign wealth fund to promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish economic security for future generations, and promote United States economic and strategic leadership internationally.
Sec. 2. Sovereign Wealth Fund. The Secretary of the Treasury and the Secretary of Commerce, in close coordination with the Assistant to the President for Economic Policy, shall develop a plan for the establishment of a sovereign wealth fund consistent with section 1 of this order. The Secretary of the Treasury and the Secretary of Commerce shall jointly submit this plan to the President within 90 days of the date of this order. Such plan shall include recommendations for funding mechanisms, investment strategies, fund structure, and a governance model. The plan shall also include an evaluation of the legal considerations for establishing and managing such a fund, including any need for legislation.
Sec. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii)
the functions of the Director of the Office of Management and Budget
relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c)
This order is not intended to, and does not, create any right or
benefit, substantive or procedural, enforceable at law or in equity by
any party against the United States, its departments, agencies, or
entities, its officers, employees, or agents, or any other person.
THE WHITE HOUSE,
February 3, 2025.
Fact Sheet: President Donald J. Trump Orders Plan for a United States Sovereign Wealth Fund
DELIVERING A PLAN TO CREATE A UNITED STATES SOVEREIGN WEALTH FUND: Today, President Donald J. Trump signed an Executive Order calling for the creation of a Sovereign Wealth Fund.
- The Executive Order directs the Secretary of the Treasury and the
Secretary of Commerce to deliver a plan within 90 days for the creation
of a sovereign wealth fund.
- The Secretary of the Treasury and the Secretary of Commerce will work closely with the Director of the Office of Management and Budget and the Assistant to the President for Economic Policy to develop the plan.
- The Order directs the Secretary to include in the plan recommendations for funding mechanisms, investment strategies, fund structure, and a governance model.
ENSURING LONG-TERM ECONOMIC COMPETITIVENESS AND FISCAL SUSTAINABILITY: The creation of a sovereign wealth fund for the United States will help maximize the stewardship of our national wealth.
- Sovereign wealth funds exist around the world as mechanisms to
amplify the financial return to a nation’s assets and leverage those
returns for strategic benefit and goals.
- The United States can leverage such returns to promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish long-term economic security, and promote U.S. economic and strategic leadership internationally.
- The United States already holds a vast sum of highly valued assets
that can be invested through a sovereign wealth fund for greater
long-term wealth generation.
- The Federal government directly holds $5.7 trillion in assets. Indirectly, including through natural resource reserves, the Federal government holds a far larger sum of asset value.
PURSUING NATIONAL ENDEAVORS AND MAGNIFYING ECONOMIC GROWTH: President Trump has called for the creation of a sovereign wealth fund “to invest in great national endeavors for the benefit of all of the American people.”
- President Trump’s economic policies—including the pursuit of fair and balanced trade, national energy dominance, and tax and regulatory relief to spur robust economic growth—will result in greater wealth and revenue streams that a sovereign wealth fund can maximize the potential of.
- Sovereign wealth funds are maintained by a diverse array of
countries leveraging equally varied classes of national assets.
President Trump has called for a sovereign wealth fund to ensure the
United States can lead the way in long-term wealth generation.
- The United Kingdom recently announced their own plans to pursue development of such a fund.
- In addition to countries around the world maintaining their own funds, 23 states within our own country maintain their own funds that control in total $332 billion in assets.
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