EO 14196: A Plan for Establishing a United States Sovereign Wealth Fund
TLDR
This executive order establishes a U.S. Sovereign Wealth Fund to promote fiscal sustainability and economic security, with Treasury and Commerce secretaries tasked to develop the framework within 90 days, though critical details about funding and implementation remain undefined.
This executive order directing establishmes a United States Sovereign Wealth Fund (SWF), marking a significant shift in U.S. economic policy. The order tasks Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick with developing the fund’s framework within 90 days.
Purpose and Goals
- Promote fiscal sustainability and reduce tax burdens on Americans
- Establish economic security for future generations
- Enhance U.S. economic and strategic leadership internationally
Implementation Timeline
- 90-day deadline for initial plan development
- Full fund establishment expected within 12 months
Potential Benefits
- Research shows SWFs can reduce inflation and improve economic stability
- May provide additional government revenue without increasing taxes
- Could serve strategic purposes in key sectors and investments
Critical Uncertainties
- Funding sources remain undefined and unclear
- Congressional approval will likely be required
- Implementation depends on available appropriations
Strategic Implications
- Could be used for strategic acquisitions, including potential TikTok purchase
- May follow models of successful state-level funds like Alaska’s $82 billion Permanent Fund
- Aims to monetize U.S. government assets for public benefit
The executive order represents a framework rather than an operational plan, with crucial details about funding mechanisms, investment strategies, and governance structure yet to be determined through the mandated 90-day planning process.
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.
© 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.