White House calls for establishment of a U.S. Sovereign Wealth Fund

In a recent executive order, The White House is calling for the federal government to establish a Sovereign Wealth Fund (SWF) that will "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.”

The idea of a U.S. SWF is not entirely new; the Biden administration looked into setting one up in 2024, and, according to the White House fact sheet released along with President Trump’s executive order, 23 U.S. states, including Alaska, New Mexico, and Texas, maintain state SWFs that control in total $332 billion in assets.

The White House fact sheet states that “the U.S. already holds a vast sum of highly valued assets that can be invested through a sovereign wealth fund for greater long-term wealth generation.” Several other nation’s already have SWFs, but, an article in Foreign Policy notes, most of the world’s largest sovereign wealth funds belong to countries that either possess excess oil revenues or foreign exchange reserves. The article’s author argues that “The U.S. has neither (its oil revenues, while sizable, are dwarfed by the trillions of dollars it spends every year). Governments typically populate their sovereign wealth funds with budget surpluses, which Washington hasn’t had since 2001.”

The White House has not yet stated who would manage the fund or how it would be governed. The International Monetary Fund has a set of principles known as the Santiago Principles for voluntary governance of these funds. According to the International Forum of Sovereign Wealth Funds’ website, these principles “promote transparency, good governance, accountability and prudent investment practices whilst encouraging a more open dialogue and deeper understanding of SWF activities.”