New Infrastructure Funding Tools Needed

 

As the bridge tragedy in Minnesota vividly shows, America’s infrastructure is crumbling. Today, one out of three roads is in poor condition, more than 160,000 bridges are structurally deficient, mass transit systems are unable to handle increasing passenger volumes, and a significant percentage of drinking water and wastewater systems are obsolete.

 

The American Society of Civil Engineers estimates that $1.6 trillion is needed over five years to bring our infrastructure systems into good repair. Yet current financing mechanisms, such as formula grants and earmarks, are not designed to absorb this staggering cost or to meet these growing needs.

 

We have introduced bipartisan legislation establishing the National Infrastructure Bank, a new method through which the federal government would be able to finance more effectively large capacity-building infrastructure projects of substantial regional and national significance with public and private capital.

 

Infrastructure projects with a potential federal investment of at least $75 million would be brought to the bank’s consideration by a public sponsor. To determine an appropriate level of federal investment, the bank would use a sliding scale that incorporates conditions such as project location, cost, usage, and nonfederal revenue. Once a level of investment is determined, the bank would develop a government-backed financing package that could include direct subsidies, loan guarantees, and long-term tax-credit bonds.

 

We are pleased that this legislation and other innovative measures, including the Wyden/Thune bill, will be debated in the coming weeks.

 

 

 

Our nation’s infrastructure is being stressed to the breaking point. Our ports and rail lines are at or near capacity. Our highways are clogged. Our bridges are in need of repair. All the conventional funding sources are coming up short. It’s time to think outside the box—and outside the trust funds. The federal government is practically the only entity not borrowing money for large-scale capital projects, but because of the tremendous need, it should and it must.

 

Although our legislation, known as Build America Bonds, would focus only on transportation projects like roads, bridges, transit, rails, and ports, both it and the Dodd/Hagel National Infrastructure Bank Act would create jobs, spur the economy, and ultimately save lives by issuing bonds to fund desperately needed infrastructure improvements.

 

Build America Bonds would provide $50 billion in new funding for transportation projects selected by the states. It would also allow Americans to personally buy bonds as a direct investment in the infrastructure that they use every day.

 

Improvements made possible through Build America Bonds would enhance safety and possibly save thousands of lives that are lost due to poor road conditions and deteriorating bridges.

 

With the potential to create more than 2.3 million new jobs over a three-year period and more than $285 billion in economic activity, Build America Bonds would also be a long-term investment in our economy.

 

Our legislation is not a substitute for fixing the federal Transportation Trust Fund. However, it is our view that the country’s infrastructure needs more than the traditional approach to funding.