Infrastructure Bank -- An Economic Elixir?

90 Second Summaries is a project of Main Street Insider. This week's episode, number 19 in season 2, looks at the infrastructure bank proposal sponsored by Congresswoman Rosa DeLauro. The President is expected to include this concept in his jobs plan.

90 Second Summaries: Season 2, Episode 19
H.R. 402: National Infrastructure Development Bank Act of 2011
Introduced 1/24/2011
Sponsor: Rep. Rosa DeLauro (D-CT3)
Click here to download this summary (pdf)

Cosponsors: 61 (61 Democrats, 0 Republicans). Full list at http://thomas.loc.gov/cgi-bin/bdquery/z?d112:HR00402:@@@P

Status: In Energy & Commerce and Transportation & Infrastructure Committees. Financial Services has partial jurisdiction. T&I Chairman John Mica (R-FL7) has announced his opposition. No action scheduled as of 9/6/11. President Obama is expected to include a proposal of this nature in his jobs package, which will be released later this week.

Senate Companion: S. 652, Building and Upgrading Infrastructure for Long-Term Development (the BUILD Act), sponsored by Sen. John Kerry (D-MA). 8 Cosponsors (6D, 2R). Similar in concept but different in details and smaller in size/scope. In Finance Committee, no action scheduled as of 9/6/11.

Purpose: In 2009, the American Society of Civil Engineers gave America's infrastructure a grade of D, and estimated the 5-year need for investment at some $2.2 trillion. The Infrastructure Bank provides a funding mechanism for a variety of projects through public-private partnerships that will help close the "infrastructure gap".

Summary: H.R. 402 would establish an independent, wholly-owned government corporation called the National Infrastructure Development Bank. Following a $25 billion initial capitalization over five years, it would be a self-sustaining entity capable of leveraging as much as $625 billion in private investment by issuing direct loans and subsidies, loan guarantees, bonds and debt securities, borrowing on the global capital market at low interest rates and pooling infrastructure-related loans and securities on the market to spread risk. The Bank would help capitalize the following:

1) Transportation Infrastructure Projects (e.g. public transit, highway and bridge repairs, port development)
2) Environmental Infrastructure Projects (e.g. drinking water treatment, waste disposal facilities, dams and levees)
3) Energy Infrastructure Projects (e.g. retrofitting buildings, smart grid, development of renewable capacity)
4) Telecommunications Infrastructure Projects (e.g. broadband expansion)

The legislation lays out a set of criteria for each project type by which each applicant must be evaluated to determine potential impact and eligibility. These generally involve environmental, health and income distribution considerations as well as more traditional cost-effectiveness criteria and other sector-specific factors.

The Bank will be governed by a five-member Board of Directors, all appointed by the President and confirmed by the Senate. The Directors will represent different regions of the country and be split between the private and public sectors in their backgrounds. The Bank's charter is scheduled to sunset after 15 years.

CBO Score: None provided. A 2008 CBO report included a discussion of an NIB and similar proposals: http://1.usa.gov/qcmLVJ

Supporters: President Obama, Building America's Future (state & local electeds), Chamber of Commerce, SEIU, etc.

• Supporters believe this measure will substantially boost crucial infrastructure spending and create jobs. It will also allow for a more efficient allocation of infrastructure resources by removing political considerations.

Opponents: No public opposition, but expected to draw fire from a variety of fronts, each for a different reason.

• Opposition will likely be opposed to a large new government program, especially a government-owned bank. Some have argued that this would be a handout to unions.

Further links
Full bill text: http://www.govtrack.us/congress/billtext.xpd?bill=h112-402
Official CRS summary: http://www.govtrack.us/congress/bill.xpd?bill=h112-402&tab=summary
American Society of Civil Engineers Report Card for America's Infrastructure: http://www.infrastructurereportcard.org/
Main Street Insider interview with Rep. DeLauro: http://www.youtube.com/watch?v=_xclINQYSA4
Transportation for America statement on the Senate bill: http://bit.ly/gonrNW
AP Article on Obama's jobs package and the Infrastructure Bank: http://yhoo.it/n0n35h
Rep. Mica op-ed opposing Infrastructure Bank: http://bit.ly/pOTF7Z

Category:

News & Politics

Tags:

• Rosa DeLauro
• infrastructure
• infrastructure bank
• infrastructure spending
• spending
• jobs
• economy
• economic recovery
• H.R. 402
• Barack Obama
• jobs speech
• American Jobs Act

[MrJohngalt2011]

Wasn't the first stimulus of almost $1T for "shovel ready projects" that would guanentee (WH words) that unemployment would stay below 8% and address this problem. Can I ask - why would be do again what didn't work in the past and what exactly did we get for $1T of our grandchilderns money?

[MainStreetInsider]

@MrJohngalt2011 Only 8% of the stimulus funding was directed at infrastructure projects, whereas a full third of it was tax cuts. Whether or not the stimulus worked, it is illogical to state that an infrastructure bank is "what didn't work in the past" in reference to the stimulus.

[mitchgunthorpe]

that's my Bammer- never saw a chance to privatize he didn't drool over. Bob rubin and pete Peterson are proud of you Mr. President.

and the rabid randian/friedmanites call this creature of Harvard a "socialist."

classic...