The U.S. Treasury Secretary stated that the Trump administration has shelved the sovereign wealth fund plan and shifted its focus to repaying U.S. debt
U.S. Treasury Secretary Becerra stated that the Trump administration has suspended plans to establish a sovereign wealth fund and will instead focus on repaying national debt. Becerra pointed out that the government will utilize existing agencies to execute some of the originally planned functions and will propose relevant recommendations within 90 days. Despite concerns from the outside about the Republican tax reform bill potentially exacerbating the debt burden, Becerra believes that the bill will promote economic growth, help reduce the debt ratio, and predicts that U.S. GDP growth will exceed 3% next year
According to the Zhitong Finance APP, U.S. Treasury Secretary Becerra stated that the Trump administration has suspended plans to establish a sovereign wealth fund and is instead focusing on repaying national debt.
In an interview, Becerra said, "I think the president has decided to pause this plan because we have other things to deal with right now. He mentioned a few days ago that we might spend more time repaying debt. He is highly concerned about the issue of debt repayment."
In February of this year, Trump instructed the preparation for the establishment of one of the largest sovereign wealth funds in the world and proposed funding the fund by monetizing government assets for key mineral projects or strategic investments, such as stakes in companies like TikTok. At that time, Becerra indicated that the fund could be officially launched within 12 months.
However, according to foreign media reports last week, this grand vision has quickly dropped in priority after encountering legal, financial, and political obstacles. The government is now turning to a simpler, smaller investment mechanism that does not require congressional approval, utilizing existing government agencies to perform some of the original plan's functions.
According to informed sources, Becerra and Secretary of Commerce Raimondo submitted relevant proposals within 90 days at Trump's request and submitted the plan earlier this month. However, White House officials were not satisfied with the proposal, and it was ultimately not presented to the president for approval.
In the interview, Becerra also responded to concerns that the latest Republican tax reform bill could exacerbate the debt burden. The bill will raise the debt ceiling, raising concerns among some about the U.S. debt-to-GDP ratio.
"This bill will bring economic growth," Becerra stated, "which will help reduce the debt ratio. I am not worried about the structure of U.S. debt because once the trajectory of economic growth changes, many issues will be resolved." He also predicted that by this time next year, U.S. GDP growth will exceed 3%
