In his post, “One Way to Rebuild America” at The New Republic, TDS-Co-Editor William Galston makes a persuasive case for “a national infrastructure bank,’ to restore America’s deteriorating network of roads, bridges, sewers, mass transit systems and other essentail public facilities needed for healthy economic growth.
The National Infrastructure Bank, which was proposed by a bipartisan commission and in legislation now before both houses of congress, was supported by President Obama during his campaign for president. Here is the basic outline, according to Galston:
The bank would be established with an initial infusion of federal capital–$60 billion is a frequently cited figure–and an independent board of directors. All projects seeking federal support over a fixed amount ($75 million in the 2007 Dodd/Hagel version) would have to be submitted to the bank for approval. The governors would employ an explicit and rigorous template for evaluating projects’ benefits and fundability. Projects surviving this test would be eligible for a range of financing options.
Beyond reducing the influence of local pork-barrel considerations on infrastructure investments, the bank would offer two other advantages. First, it could mobilize additional capital by reselling the loans it makes in the private market. This would enable the bank to make more loans without additional appropriations, multiplying the bank’s impact on the direction and level of investment. Second, it could help smooth over some short-term political problems. Rather than forcing current taxpayers to bear the entire burden of investments from which the next generation will also benefit, revenue bonds would enable all users over a period of decades to pay a fair and affordable share..
Galston acknowledges that the proposal has some powerful foes, including some “congressional appropriators,” who fear the bank’s independent Board fo Directors might “clip their wings” and there are even rumors of some opponents of the proposal on President Obama’s senior staff. But Galston nonetheless sees a near-perfect match of compelling need and available resources that can be best addressed by the proposal:
We have an urgent need–a growing gap in providing public goods that improve economic efficiency as well as the quality of social life. We have massive unused resources, in the form of idle plants and equipment and sky-high unemployment. Infrastructure investment creates high-quality jobs here at home, and it produces tangible results to which politicians can point with pride…It’s a natural centerpiece for any agenda that emerges from the White House’s December “jobs summit.”
Galston puts the challenge to the white house to provide the needed leadership. “Will the president have the courage of his campaign convictions?…Will we become once again the country that created the interstate highway system? Or are we too divided and dispirited even to try?” Good questions, and America’s economic future may well depend on the answer.