Once again, a signature transportation proposal of the Obama Administration seems headed for the rocks. A national infrastructure bank was supposed become the vehicle for filling at least part of the nation's needs for new roads, highways, bridges and other physical infrastructure. As of now, the proposal is nowhere to be seen in Congressional transportation authorization proposals. As C. Kenneth Orski writes in his newsletter Innovation Briefs and on-line at NewGeography.com:
"But today, the [national infrastructure bank] idea is on life support. Neither the Senate nor the House have seen fit to include the Bank in their proposed transportation bills. Congressional Democrats and Republicans alike are in agreement that decisionmaking control over major federal investments should not be ceded to a group of "unelected bureaucrats." Rather than creating a new federal bureaucracy, they think the focus should be placed on expanding federal credit assistance tools already in place, such as the Transportation Infrastructure Finance and Innovation Act (TIFIA) and the Railroad Rehabilitation & Improvement Financing Program (RRIF).
"There are other reasons for congressional skepticism. House Republicans are suspicious that the Obama-proposed Bank is nothing more than a vehicle for more stimulus spending, disguised as "capital investment." They want the Administration to be more specific about its proposal: how the Bank would be funded, what kind of investments it would fund and how the $30 billion capital would be repaid. "If this is more of the same stimulus spending, we won’t support it," Kevin Smith, spokesman for House Speaker John Boehner (R-OH) has been quoted as saying.
"House Transportation and Infrastructure Committee chairman John Mica (R-FL) thinks state-level infrastructure banks would be a more appropriate means of financing major transportation projects at the state and local level. Decentralized infrastructure financing would "keep the federal financing bureaucracy at a minimum and maximize states’ financial capabilities," according to the House transportation reauthorization proposal.
"Senate Democrats, while not necessarily opposed to another fiscal stimulus, want quick results. They fear that a centralized Infrastructure Bank, with its complex governance structure and layers of bureaucratic conditions, requirements and approvals would be far too slow and cumbersome to be an effective job generator. One or two years could pass before large-scale projects appropriate for Bank financing would get evaluated, selected, approved and under construction, one Senate aide told us."
Reason Foundation has been active in addressing this issue over the last several years. My testimony before the U.S. House Ways and Means Committee scoped out the potential and limits of an infrastructure bank in 2010. Bob Poole recently weighed in with his concerns in an issue of his newsletter Surface Transportation Innovations (No. 91, May 23, 2011).