Investing.com -- Plans for President Trump’s ambitious sovereign wealth fund, initially touted as a trillion-dollar instrument to bolster America’s economic standing, have met with significant legal, political, and financial challenges. The project, which has been three months in the planning, has failed to achieve the unrestricted investment freedom Trump had envisioned, according to a report from Bloomberg News, citing sources.
In February, Trump had directed his advisors to design a massive fund with the potential to monetize federal assets, invest in significant companies like TikTok, and support critical mineral projects. The fund was also expected to help reduce national debt. However, despite Treasury Secretary Scott Bessent’s claims that the fund would be operational within a year, the plan has not come to fruition.
Trump’s initial vision to create a fund similar to the Middle Eastern oil titans’ trillion-dollar reserves has been hampered by legal obstacles, budget constraints, and bureaucratic hurdles. As a result, the team is now working on a scaled-down investment vehicle that won’t require Congressional approval.
In the meantime, Trump has shifted his focus to debt reduction, a change in stance he made evident during his Middle East tour. The revised approach comes in response to the realization that the initial plans for the fund were financially unrealistic.
The proposal put together by Bessent and Commerce Secretary Howard Lutnick after Trump’s 90-day deadline was rejected by the White House for being too optimistic and lacking in practical funding solutions. The idea of borrowing money to kickstart the fund was criticized as it would undermine profits and make the promise of debt reduction unattainable.
In response to these challenges, Trump’s team is considering merging existing agencies such as the Ex-Im Bank and Pentagon’s Strategic Capital into a single fund. The aim is to create an oversight office that could channel money into Trump’s projects without needing Congressional approval.