Across the country, families are still feeling squeezed after the pandemic-era inflation. Prices remain high, mortgage rates are elevated, and many communities struggle to attract the investment they need to grow. Congress and the administration are right to focus on cost-of-living concerns. The best way to achieve lasting relief is by strengthening the long-term economic engine that keeps costs down: capital formation.
When businesses invest in new equipment, cities modernize infrastructure, and entrepreneurs bring new products to market, the economy grows in ways that benefit everyone. Productivity rises, which is one of the most reliable ways to ease costs for households over time. In addition, thriving local businesses create jobs and opportunities, directly supporting household well-being. That is why the bipartisan capital formation package—the INVEST Act—deserves attention. Approved by the House, the INVEST Act would help companies raise capital, expand opportunities for savers and retirees, and support growth across the economy.
The INVEST Act would double down on one of the United States’ unique advantages: the strength of our capital markets. A large share of household savings flows into these markets through regulated funds, including mutual funds, ETFs, closed-end funds, and money market funds. More than half of U.S. households—about 76 million—own these investment vehicles. Their savings finance business expansion, municipal improvements, and innovation nationwide.
Regulated funds now manage more than $45 trillion on behalf of these investors. That scale is not simply a statistic—it helps shape the real economy. Funds hold about one-third of U.S. corporate equities, one-quarter of corporate bonds, and more than a quarter of municipal securities. When a manufacturer adds a production line or a city builds a school, affordable financing often depends on the stability and depth of these investment vehicles.
The effects are tangible. Bond funds have attracted more than $1.4 trillion in inflows over the past five years, helping keep borrowing costs manageable for businesses and governments. Money market funds, with more than $7.7 trillion in assets, support a liquid and reliable short-term debt market, allowing institutions to manage cash efficiently. These funding sources support economic outcomes for households by helping businesses grow and create jobs.
Other regulated funds also play an important role. Unlisted closed-end funds and business development companies have grown rapidly, directing money toward private credit markets once dominated by large institutions. These vehicles have more than tripled in size since 2020, channeling capital to small and mid-sized businesses that often face greater challenges in accessing financing.
Capital formation helps American families by turning their household savings into productive investment. When that connection is strong, businesses expand, jobs are created, wages strengthen, and communities become better places to live.
The INVEST Act builds on bipartisan efforts to expand investment opportunities, improve retirement plan options for nonprofits, and modernize disclosure practices so investors receive more relevant and timely information. These reforms strengthen a regulatory framework that prioritizes transparency, accountability, and investor protection.
Global competition for capital is intensifying, and the United States must continue to lead. Capital formation is one of our greatest strengths, but it requires ongoing attention to remain effective, efficient, and accessible. Markets function best when investors are protected and laws evolve to keep pace with economic conditions. Congress has a responsibility to update those laws when needed, which is exactly what the INVEST Act would do.
The challenges facing American families are real. Strengthening the flow of capital to businesses and communities is one of the most effective tools policymakers have to address them. The Senate should act quickly to send the bipartisan INVEST Act to the President’s desk, delivering stronger growth, greater resilience, and a more secure future for American families. That is a goal both parties can support.
