Rob Horowitz: It’s Time to Create A National Infrastructure Bank
Tuesday, September 06, 2011
Among the job-creating proposals that are likely to be advanced by President Obama in his speech to a joint session of Congress on Thursday night is the creation of a national infrastructure bank.
This idea for using initial public seed monies to leverage private investment in order to repair and improve our aging infrastructure and to create jobs has already attracted some bi-partisan support. A Senate Bill sponsored by Senator John Kerry (D-MA), Senator Mark Warner (D-VA) and Senator Kay Bailey Hutchinson(R-TX) was introduced in the Spring. It was immediately embraced by both the US Chamber of Commerce and the AFL-CIO—certainly strange political bedfellows.
At the time the bill was introduced it was given little chance of passage due to tight budgets and predictable opposition from House Republicans. However, the political environment has shifted since the bill’s introduction creating at least a small window of opportunity. Job creation stalled over the summer. As the nation paused to celebrate Labor Day, unemployment remains stuck at 9.1%, and no new net jobs were created in August.
Perhaps most important, Democrats have now moved significantly ahead of Republicans in the closely watched generic Congressional ballot test House Republicans took a much bigger hit than the President from this summer’s extended debt ceiling debate. Now, their majority is in some jeopardy. That is why we have recently seen House Majority Leader Eric Cantor (R-VA) indicate some willingness to move on infrastructure spending.
And repairing and modernizing our infrastructure is a pressing national priority. As anyone who travels on our roads or flies knows, to remain competitive economically we must dramatically upgrade our infrastructure.. According to the American Society of Engineers, an investment of $2.2 trillion is needed just to make US infrastructure dependable and safe. This doesn’t include new needs such as upgrading our electrical grid or rail lines..
The respected public finance expert Felix Rohatyn, a leading advocate of a national infrastructure bank, believes hundreds of billions of dollars of private capital can be put to work to address our nation’s infrastructure needs. Further, a national infrastructure bank, which would be independent of Congress, will be able to select projects based on merit and revenue streams—not politics. This is how the European Investment Bank, which is spending $100 billion this year alone on projects throughout Europe, works.
A national infrastructure bank will supplement existing transportation spending and put people back to work It requires a modest initial investment of a total of $30 billion over 5 years; $6 billion annually. Then it will be self-sustaining. The combination of continued high unemployment and new Republican Congressional feelings of vulnerability may just make it possible for this sensible and innovative idea to actually come to fruition.
Rob Horowitz is a strategic and communications consultant who provides general consulting, public relations, direct mail services and polling for national and state issue organizations, various non-profits and elected officials and candidates. He is an Adjunct Professor of Political Science at the University of Rhode Island.