New Senate bill would unwind U.S. investments in minerals companies to pay national debt

Sen. Jon Husted (R-OH) on Tuesday introduced a bill that would sell U.S. ownership stakes in critical minerals companies and others after eight years and use the proceeds to reduce the national debt. The Trump administration has made investments in several mineral and mining companies, taking a $50 million stake in rare earth magnet manufacturer Vulcan and a 15 percent equity stake in rare earth processing firm MP Materials. It also has announced plans to invest in an Australian graphite mining company and says it will consider future stakes as well. The “ Investing in National Values, Economy, Strategy and Tomorrow Act ,” introduced this week, would require that such equity stakes in private companies “be liquidated to pay down the debt.” It would direct federal agencies to identify “covered equity investments” in private companies, including those in which the U.S. has “Shares of common or preferred stock,” contractual rights to require an “initial public offering, spin-off, or similar transaction for the purpose of acquiring an ownership interest” or any “golden share” stocks or “other instrument that confers board seats, veto rights, or other enhanced governance rights.” The U.S would have to liquidate these and other types of investments no later than eight years after the bill’s enactment and transfer any proceeds to the Treasury Department so it can “pay down the national debt,” it says. If the U.S. makes covered equity investments after bill’s enactment, federal agencies would have eight years to liquidate these investments, it adds. The administration has made historic investments in companies to “increase U.S. independence and economic competitiveness” in semiconductors, critical minerals and other key industries, Husted’s office said in a June 16 statement . “However, there is currently no clear process to unwind the federal government’s equity stakes once those objectives have been achieved,” it adds. Husted says the measure would prevent the U.S. from using its ownership stakes to unduly influence private companies. “Without clear guardrails, future administrations could use taxpayer-funded investments to influence private companies and advance political agendas,” he said in the statement. The INVEST Act, he added, would roll back these investments, “prevent permanent government ownership in the private sector,” reduce the national debt and “ensure federal investments remain focused on their intended purpose,” he adds. Some Democrats have raised concerns about this administration’s equity stakes , suggesting conflicts of interest. Others have argued that the Defense Department’s reliance on such investments could create “ national security threats and risks to taxpayers .” The Senate Armed Services Committee earlier this week proposed legislation that would give the Pentagon’s credit office the authority to make equity investments in private companies. -- Jason Asenso ( jasenso@iwpnews.com )