Trump's Quest for a Presidential Slush Fund: When Dealmaking Meets Constitutional Limits

Pay $1 billion and extend your membership for three years. Control Venezuelan oil revenues personally. Claim $550 billion in Japanese investments as "our money to invest, as we like."

These aren't hypothetical scenarios—they're actual proposals from Donald Trump's second presidency. And they all point to the same underlying obsession: creating discretionary pools of money that he can control directly, outside the normal constraints of congressional oversight.

The Tariff Shakedown Strategy

Trump's recent "deals" with allies follow a clear pattern. Japan and South Korea received tariff relief in exchange for massive investment pledges that Trump claims to personally oversee. But these arrangements reveal more about Trump's governing philosophy than about effective diplomacy.

Unlike traditional trade agreements, these deals lack binding enforcement mechanisms. When Trump boasted about Japan's $550 billion "signing bonus," the reality was more complex: Japanese investments are structured through public finance institutions and investment committees, not a cash pot for presidential discretion.

The enforcement mechanism? Endless tariff threats. After reaching a trade deal with Europe in July, Trump quickly revived tariff threats when tensions emerged over his Greenland demands. These arrangements are built for headlines, not durability.

The Sovereign Wealth Fund Dream Deferred

Trump's improvisational approach stems from an earlier, more ambitious plan. Early in his second term, he ordered the creation of a US sovereign wealth fund—a government investment vehicle that would put him at the center of major capital allocation decisions.

The appeal was obvious: Trump as dealmaker-in-chief, personally directing strategic investments. But a formal sovereign wealth fund would require congressional legislation, complete with governance rules and oversight mechanisms. Too slow, too constrained for Trump's taste.

Treasury Secretary Scott Bessent revealed the pivot: "Other countries, in essence, are providing us with a sovereign wealth fund." The key phrase is "in essence"—there's no actual fund, just executive branch attempts to leverage tariffs into Trump-selected projects.

Government as Investor: The Equity Grab

What emerged instead was a series of ad hoc equity acquisitions. Trump pressured Nippon Steel into giving him a "golden share" in its U.S. Steel purchase. The government acquired a 10% stake in Intel using repurposed CHIPS Act funds. The Pentagon took equity positions in defense contractors like L3Harris.

The administration now holds equity stakes in 12 private companies, with plans for more. But this creates obvious conflicts of interest—the government becomes customer, regulator, and partial owner simultaneously.

The Intel case is particularly telling. Rather than framing the equity stake as temporary emergency assistance, the administration portrayed it as "indefinite strategic ownership." This represents a fundamental shift from historical practice, where federal equity investments were reserved for genuine crises.

Creative Legal Interpretations

Perhaps the most brazen example involves Nvidia and AMD chip exports to China. Trump initially wanted a direct 25% cut of sales revenue—until advisers pointed out that the Constitution bars export taxes.

Cue the improvisation: Trump imposed a 25% tariff specifically on advanced chips, then allowed Nvidia and AMD to export to China while collecting the tariff revenue. As technology expert Paul Triolo noted, "There is no precedent for this type of approach to tariffs and semiconductor policy."

The Venezuelan oil seizure follows similar logic. After Trump declared he would personally control the proceeds, the White House hastily created "Foreign Government Deposit Funds" in Treasury accounts. The money remains Venezuela's property, but only the Secretary of State can authorize its release.

Constitutional Guardrails Under Pressure

These schemes consistently bump against fundamental constitutional principles. The Constitution grants Congress "power of the purse," stating that "no money shall be drawn from the Treasury" without legislative authorization. Federal budget laws reinforce this constraint.

The Antideficiency Act prohibits agencies from spending beyond congressional appropriations. The Miscellaneous Receipts statute requires government revenues to flow to Treasury unless specifically authorized elsewhere. These rules exist precisely to prevent presidents from creating their own funding mechanisms.

Trump's grand promises—using tariff revenue for a "Dream Military" or replacing federal income tax—have made no progress because they would require congressional action he hasn't sought.

The Board of Peace: Pay-to-Play Diplomacy

Trump's latest initiative, the "Board of Peace," epitomizes his approach. Countries can serve three-year terms unless they contribute $1 billion "in cash funds" for extensions. The chairman (Trump) would have "substantial control" over operations.

When Trump announced a $10 billion US contribution, the obvious question arose: where's the congressional appropriation? Critics have "likened [the Board] to a giant slush fund Trump will control," as CNN's Aaron Blake noted.

When Precedents Become Dangerous

The legal question "Is this constitutional?" doesn't have simple answers. Some schemes may survive judicial review; others won't. The Supreme Court's pending ruling on Trump's "emergency" tariffs will provide important guidance.

But the deeper risk isn't just potential illegality—it's normalization. Trump is treating money receipt and disbursement as instruments of personal power rather than constitutional governance. He's eroding the principle that federal authority should operate through general rules rather than personalized deals.