Sometimes you can't kill a good idea.
Late last year, the Senate removed a proposed "national infrastructure bank" from the 2010 budget bill, shooting down what looked like a better way to fund the rebuilding of our transportation systems. The idea was to replace the current pork-barrel-laden appropriations process with a long-term funding mechanism that would raise money through bonds and direct it to road and other infrastructure projects that advance national interests rather than provide plums to be handed out by legislators to their constituents. It had been kicking around since 2007 under various names, but was rejected every time.
Then last month, it not only came back from the dead, but was moved front and center in the legislative agenda with the very powerful endorsement of President Barack Obama. Strengthening its chances of finally getting Congressional approval, President Obama tied the infrastructure bank to an immediate $50 billion of spending on transportation meant to stimulate the economy and address unemployment.
Part of a Labor Day rally-the-troops speech before the November elections, the President's proposal glossed over some important points, specifically how to pay for that first $50 billion and how to actually fund an infrastructure bank. Since no one is anxious to add to our national debt, it was no surprise that Republicans saw opposition to the plan as another chip to be played in the upcoming midterm elections. Taking the lead, House Minority Leader John Boehner (R-OH) called it "more of the same failed stimulus spending." And some Democrats — eyes on the same elections — have responded coolly to the idea as well.
But the concept is still a good one. An infrastructure bank would issue bonds and use the proceeds to fund specific major infrastructure projects, in effect spreading the cost of projects with long-term benefits over time. It would also leverage private funds invested in those bonds instead of consuming only dollars raised through taxes.
It's clear that the six-year transportation reauthorization process is both an inefficient and ineffective way to fund long-term projects like infrastructure repair and construction. It relies on formulas and political clout to dole out funds to states and localities with little regard for addressing transportation as what it truly is — an integrated national network. Congressional seniority trumps rational planning every time in this scenario.
In addition to the cost benefits, an infrastructure bank would at least partially insulate these investments from Congressional influences, allowing us to fund projects that cross state lines and satisfy regional and national transportation needs.
Once again, penny wise and pound foolish may prove to be the legislative rule when it comes to our highways, rails, airports and other essential transportation elements. The new transportation reauthorization bill is already almost a year overdue, and the tax funds raised to repair our highways are being doled out with temporary spending measures. Political expediency argues that Congress will rush to endorse business as usual over long-term vision when it comes to funding transportation. Once again, we will have wasted an opportunity to realize the real economic development that comes from an efficient, effective transportation system.
