Washington, D.C. - Congress will hold a hearing today at 2:30pm in the Rayburn House Office building to discuss the role of foreign governments' investments in the United States.   

Sovereign wealth funds - investment funds owned by national governments - are the most visible source of foreign government investment in the United States at present. These funds are increasingly making investments in U.S-owned banks, private companies, equity funds, and real property, among other assets. While they do not include the purchase of U.S. debt to fund the nation's perpetual deficit spending, experts estimate the sovereign wealth funds invested $21.5 billion in American companies over the last year.  

The declining value of the dollar makes foreign currency more valuable, and thus investments in the U.S. more affordable.  But some fear that a run in foreign investments could leave a substantial part of the U.S. economy owned by untrustworthy foreign governments like China.

Staunch capitals argue that sovereign wealth funds, by infusing cash into cash-strapped U.S. companies, serve an important role and are helping to prevent the economy from slipping into a recession.  However, most still agree that pushing for transparency in the investments to monitor the actions of the more despotic governments like Venezuela and Iran remains of paramount importance.  

The hearing marks the first time a sovereign wealth fund has appeared before a Congressional committee, and we commend Congress for being ahead of the media on the issue.  Each of the funds slated to appear today has a long record of stable commercial investment in the United States.  Norway's Government Pension Fund, Global, and Singapore's Temasek Holdings Ltd. are among the largest sovereign wealth funds internationally.  Canada's Public Pension Investment Board, though not itself a sovereign wealth fund, is a public pension fund owned by the Canadian government and has substantial investments in the United States.  

Members of the House Financial Services Committee, led by Luis Gutierrez (D-IL) and Congressman Paul E. Kanjorski (D-PA), will attempt to extract as much information as possible from these trusted sovereign wealth fund representatives.  Questions should revolve around the reason for their interest in the U.S., the types of investments they are making, the manner in which they disclose information about the deals, and their perceptions of the climate for investment in the U.S.  The information will help legislators begin crafting policy to ensure that all investments are monitored, recorded, and in the nation's best interests.  

"These three funds are widely viewed as being among the best global players when it comes to government investment," said Congressman Gutierrez about the funds represented on the Hill today.  "Their input at the hearing will be invaluable as we consider the need for policy responses in the United States, including the development of best practices for sovereign wealth funds."

"With a continuously expanding global marketplace, it is inevitable for foreign governments to invest in American companies," said Congressman Kanjorski. "This hearing will take initial steps to examine such investments and to discuss whether there is a need for increased transparency as foreign investment in America continues to grow rapidly. Our goal is to ensure the soundness of our financial markets, but we must put our national interests first. This hearing will help to explore how we can take both actions."

Those interested in hearing more about this issue should watch the discussion that unfolded over it on CNBC yesterday here.

Those really interested can watch the webcast of the hearing here.