Washington, D.C. – The Senate’s version of the 2027 National Defense Authorization Act would create a new Pentagon-linked account allowing the federal government to take ownership stakes in private companies tied to critical minerals, materials, chemicals, and batteries.
Reason reported that the proposed Defense Equity Investment Account would let the Defense Department make investments of up to $500 million in non-federal entities. The bill would allow ownership interests, convertible interests, warrants, revenue-sharing instruments, and similar financial tools, while barring the government from taking more than a 50% stake in a company.
Supporters of federal equity investments argue the tools can strengthen supply chains needed for national security, especially as the U.S. competes with China over minerals and defense production. Critics say the approach risks turning taxpayers into shareholders while giving presidents more power to pick favored companies.
Cato Institute analyst Tad DeHaven warned that Washington can support domestic production through permitting reform, procurement, or regulatory changes without becoming an investor in private firms.
The proposal also raises ethics questions. NOTUS reported that Senate Republicans rejected an amendment that would have barred Pentagon investments in companies tied to Trump, his family, Cabinet officials, or their families.
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