Department Of War Is Now A Bank

Article posted with permission from the author, Karen Schumacher

While President Biden has taken a fair share of criticism, President Trump is continuing some policies that originated from him.  One of those policies is the Office of Strategic Capital (OSC) that was established in December, 2022.  The intent was to work with companies that developed “technologies vital to national security”.  Those technologies included quantum science and biotechnology for “national security” and “defense capabilities”.  Since these companies often lacked the needed capital, the Department of War (DoW) would become the investment bank for them by providing the needed loans.

10 USC 149: Office of Strategic Capital, signed into law in 2023, offers the legislative authority for OSC with other legislative updates along the way.  More legislative details on technologies for investment include mobile robots, biochemicals, biomass, cybersecurity, hydrogen generation, microelectronics, nanomaterials, nuclear fission, and critical minerals, among many other items.  OSC even advertises its debt financing and investment fund financing products and offers comparable interest rates, repayment schedules, long repayment periods, and even a deferred payment of several years.  A full-service bank.

In this May 4, 2026 Congressional Research Service report, an overview of the OSC mission, programs, and funding is provided, and whether it should be provided the authority to make equity investments.  The report outlined that the OSC Director is authorized to grant loans and loan guarantees to corporations and joint ventures to be used for technologies that meet DoW technology needs in 34 categories.  However, this is to be a pilot program until 2028, depending on the availability of money appropriated to it.  The first application window closed in February 2025 with loan amounts between $10-150 million.

In its Investment Strategy for 2025, OSC would prioritize investments through credit-based financial products for critical technologies, assets, and their supply chains.  OSC offers these loans with some loan guarantees covering the company’s debt obligation if it defaults on the loan.  That means taxpayers pick up the tab.  And why not?  It was done with Solyndra.

OSC’s first customer was MP Materials in July, 2025 for $150 million.  In November, 2025, OSC agreed to $700 million conditional loan commitments with $620 million to Vulcan Elements and $80 million to ReElement Technologies.  There was just a slight bobble of questionable cronyism by the President with the Vulcan deal.  A total of $1 billion was granted to Vulcan to build a factory, with the U.S. Department of Commerce taking a “$50 million equity stake in the company.  Can’t get a better example of cronyism, or maybe fascism, than this.  Regardless, lots of money is made, and ReElement came through and developed something for “national defense“.

The government paying for these technologies with loans isn’t without risks.  Some of those risks include volatile rare earth element prices, changes in Chinese export policies, changes in the importation of products, or just plain old geopolitics.

Like every other new government program, OSC will need to “build a new and very large program staff to administer the $200 billion worth of loans over four years that Congress just authorized”, and give justification for it continuing to balloon out of control.  Already, the requested amount to support this loan program is $20.2 billion, way up from the $1.5 billion allowed the year before.

One has to ponder if this direction by the government is reasonable.  After all, we Americans want to be kept safe from the rest of the America-hating world and protected from depending on resources that can only be obtained from those countries.  The use of artificial intelligence (AI) has already been tested in Israel and continues with the Iran war.  Drones and other weaponry are being built with technology that will require access to the resources needed to build them.  Humans are their own worst enemy by designing more ways in which to destroy themselves.  Now the government has designed a way that will fund and profit from it.

There is something about this whole affair that indicates the foundation upon which our government was created has been shattered.  The government giving money to corporations and joining in as a partner to build something intended for use in warfare doesn’t seem to be part of the Constitution.  It also might be an ominous sign of how much further this conduct will be taken into other areas, what other sectors the government will directly fund for whatever agenda.

“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”