HR-9954-119
Referred to the Committee on Financial Services, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Sponsored by Christopher Deluzio (D-PA)
What it does
This bill would establish the Manufacturing Sovereign Wealth Fund, a government-owned investment entity that would make equity investments and loans to U.S. companies in strategic manufacturing, technology, supply chain, and workforce sectors. It would be funded through a combination of direct appropriations totaling $310 billion over 10 years, a 1-percentage-point corporate tax rate increase (from 21% to 22%), redirected automobile tariff and antidumping duty revenues, a 1% fee on corporate mergers and acquisitions over $1 billion, a 0.1% fee on high-volume stock sales, and a per-transaction fee on stock buybacks. Starting in 2032, 25% of the Fund's average annual proceeds would be distributed to eligible U.S. taxpayers as a refundable tax credit called the "Build America Dividend." The Fund would operate for 10 years before liquidating, with remaining assets transferred to the Department of Commerce.
Who benefits
U.S. manufacturers in strategic sectors (semiconductors, robotics, batteries, defense supply chains) who receive equity investments or loans. Workers in manufacturing industries who would gain from prevailing-wage requirements, union neutrality provisions, and job-retention conditions. Deindustrialized communities and regions targeted for investment. Small and medium-sized manufacturers and registered apprenticeship programs. Community colleges and workforce development organizations. Domestic suppliers who benefit from reshoring of supply chains. Eligible U.S. taxpayers who would receive the Build America Dividend starting in 2032. National security interests that benefit from reduced foreign supply chain dependence.
Who is hurt
Companies that offshore manufacturing operations, who would face a production offshoring fee calculated on labor cost differentials and past federal subsidies received. High-volume stock traders (those selling more than $1 million in equities per year) who would pay a 0.1% fee on sales above that threshold. All corporations, which would face a 1-percentage-point corporate tax rate increase. Companies conducting mergers and acquisitions over $1 billion, who would pay a 1% fee on transaction value. Companies conducting stock buybacks, who would pay $100 per transaction. Shareholders and investors in companies subject to the Fund's "golden share" veto rights, which restrict offshoring, foreign sales, IP transfers, and layoffs. Foreign-linked companies and subsidiaries of foreign entities of concern, who would be ineligible for Fund investments. Taxpayers broadly, who bear the cost of $310 billion in direct appropriations.
Supporters argue
Supporters argue that decades of deindustrialization have left the U.S. dangerously dependent on foreign supply chains for critical goods — a vulnerability exposed during the COVID-19 pandemic when shortages of semiconductors, pharmaceuticals, and personal protective equipment disrupted the economy and national security. They contend that the Fund's structure — modeled on sovereign wealth funds used by allied nations like Norway and Singapore — would allow the government to act as a patient, strategic investor rather than a short-term subsidy dispenser, with the golden share mechanism ensuring that public investment is not simply captured by shareholders through buybacks or offshoring. They further argue that the Build America Dividend would return investment profits directly to citizens, creating a broad public stake in the Fund's success.
Opponents argue
Opponents argue that the Fund concentrates enormous discretionary investment power in a presidentially appointed board, creating significant risks of political favoritism, misallocation, and cronyism — concerns reinforced by the history of programs like the Department of Energy's loan guarantee to Solyndra. They contend that the 50-year restrictions on overseas operations and the golden share veto over layoffs, IP licensing, and mergers would impose unprecedented government control over private business decisions, potentially chilling investment and innovation in the very sectors the Fund targets. They further argue that the new fees and the corporate tax increase would raise costs for U.S. businesses and investors, potentially reducing the private capital formation that drives manufacturing competitiveness more effectively than government-directed investment.
Constitutional context
Congress's authority to establish the Fund rests on the Commerce Clause (Art. I, §8, cl. 3) and the Necessary and Proper Clause (Art. I, §8, cl. 18), as the bill regulates interstate manufacturing and supply chains — activity clearly within Commerce Clause reach under Wickard v. Filburn (1942). However, the broad rulemaking authority delegated to the Board of Governors — including authority to define "offshoring," set tiered fee structures, and determine investment sectors — may face nondelegation challenges and heightened post-Loper Bright judicial scrutiny, as courts will independently assess whether the statutory language provides sufficient guidance. The golden share veto over company decisions and the 50-year operational restrictions could also raise Takings Clause questions under the Fifth Amendment if applied in ways that destroy property value.
Checks and balances
The executive branch gains significant new investment and regulatory authority through the presidentially appointed Board of Governors, but is checked by Senate confirmation of all 13 board members, mandatory annual reporting to Congress, dual audits by both the Inspector General and the GAO, a public transparency portal, and a 10-year sunset with liquidation requirements.
Historical precedent
The CHIPS and Science Act of 2022 similarly used direct federal appropriations (~$52 billion) to subsidize domestic semiconductor manufacturing with conditions on recipients, including restrictions on expanding capacity in countries of concern — though it did not establish a permanent investment fund or include equity ownership stakes.