Early last September, the Obama White House proposed a Federal Infrastructure Bank, which the construction industry hoped would bring a much needed infusion of private capital into more “shovel ready” projects, and help in starting a resurgence of the severely depressed construction sector of the American economy. Well, the shovels are still ready, but the infrastructure bank concept, like so many legislative initiatives for creating jobs, is mired in the politics of spending cuts and debt reduction.
The Obama Administration’s original proposal was creation of a permanent federal infrastructure bank, which would use grants, loans and loan guarantees to attract state and local funding, and private investment, to revenue generating transportation infrastructure construction projects. According to the September 9, 2010 White House press release, the proposed infrastructure bank would be:
“…an important departure from the federal government’s traditional way of spending on infrastructure through earmarks and formula based grants that are allocated more by geography and politics than demonstrated value. Instead, the Bank will base its investment decisions on clear analytical measures of performance, competing projects against each other to determine which will produce the greatest return for American taxpayers.”
Of course, that overt threat to end Congressional earmarks against the Highway Trust Fund probably assured the death of the infrastructure bank proposal from the Obama Administration. As a result, Obama’s February 14, 2011 budget message phrased the concept a little more elegantly:
“A cornerstone of the I-Bank’s approach will be a rigorous project comparison method that transparently measures which projects offer the biggest value to taxpayers and our economy. This marks a substantial departure from the practice of funding projects based on more narrow considerations.”
So, unlike the Obama Better Buildings Initiative, which has never even been introduced in the form of legislation, the infrastructure bank concept has at least left the starting blocks, in the form of SB 652, the BUILD Act, and SB 936, the AIIF Act. Neither piece of proposed legislation has even made it over the first hurdle, though.
Unfortunately, Senator Kerry's 57 page Building and Upgrading Infrastructure for Long-Term Development Act, Senate Bill 652, is bottled up since March 17 in the Senate Finance Committee, while Senator Rockefeller's 67 page American Infrastructure Investment Fund Act, Senate Bill 936, is bottled up since May 10 in the Senate Commerce, Science and Transportation Committee. Neither proposal is going anywhere, in my estimation, until two conditions are met: 1) our political leaders finish their cat fight over increasing the debt limit and reducing federal spending; and 2) someone proposes to support the federal highway trust fund with a source of infrastructure funding revenue as an addition to, or an alternative to, the current motor fuel tax.
The breakdown last week of the debt limit negotiations, and the Republican refusal to consider any new taxes, likely sound the death knell to both SB 652 and SB 936. In the absence of a massive letter writing campaign from construction businesses in favor of one or both of these proposals, there isn't going to be an Infrastructure Bank set up any time soon. If you would like to see an Infrastructure Bank get moving, write to your own Senators, and to members of the Senate Commerce Committee and members of the Senate Finance Committee in support of it.
