National Infrastructure Bank: An idea whose time has come? Proposals would attract greater private funding for projectsBy Peter A. Buxbaum, AJOT America’s looming infrastructure crisis has been receiving increasing media attention over the last few years. Outdated port facilities, incomplete rail connections, and crumbling roadways threaten to slow a tentative economic recovery. But the crisis could give rise to an opportunity. Investing in infrastructure could provide a positive jolt to the economy and create jobs. It could also be a boon to the project and heavy lift cargo sector, as construction equipment, rail-laying machines, and other large and heavy pieces would need to be moved to potentially hundreds of major infrastructure projects across the country. One proposal which has been advanced to provide funding for infrastructure projects has been the establishment of a national infrastructure bank. The idea of an infrastructure bank is not new: the European Union has one, as do several states. A proposal to establish a United States national infrastructure bank dates back to 2007, when then-Senators Charles Hagel (R-Neb.) and Christopher Dodd (D-Conn.) co-sponsored a bill to create one. A national entity, so the theory goes, would take pressure off state and local government and off property taxes to fund long-term, large-scale infrastructure projects. In 2009, Rep. Rosa DeLauro (D-Conn.) introduced a National Infrastructure Bank Development Act with funding of $25 billion. More recently, Republicans in the House of Representatives have reportedly floated the idea of a $250 billion infrastructure bank, the same figure lobbied for by Baltimore businessman Christopher Lee. Lee, who helped privatize the Seagirt Marine Terminal in 2009, says that a federal startup investment of $250 billion would attract $750 billion in private investments. Although a proposed national infrastructure bank has attracted bipartisan support, experts say it would take a miracle for the bank to emerge from the current session of Congress. Its future hopes hinge, presumably, on the outcomes of the presidential and congressional elections. Transportation projects stand to be among the major beneficiaries of a national infrastructure bank. “There are current proposals to establish a standalone bank, or one within the Department of Transportation,” said Marcia Hale, president of Building America’s Future, an interest group which supports the bank. “We prefer the standalone proposal but transportation is major piece of what we have advocated.” BAF is a coalition of state and local government officials and was founded by New York mayor Michael Bloomberg, former Pennsylvania governor Ed Rendell, and former California governor Arnold Schwarzenegger. An infrastructure bank could finance infrastructure projects in much the same way a the Export-Import (ExIm) Bank of the United States boosts exports, by providing guarantees to private lenders on their loans to overseas buyers. “The ExIm Bank provides a good model for a national infrastructure bank,” said Hale. A recent report from BAF described how the country’s sagging infrastructure has caused the U.S. to lag in competitiveness and outlines proposals to turn that situation around. U.S. infrastructure has fallen from first place in the World Economic Forum’s 2005 economic competitiveness ranking to number 15 today, according to the report. None of the top ten world ports are located in the U.S., while China now boasts six of those ten. There are 15,000 miles of high‐speed rail in operation around the world, but none in the U.S. Besides advocating for a national infrastructure bank, the BAF report also calls for “a robust transportation bill that focuses investment on projects that will increase economic return and mobility while reducing congestion and pollution.” BAF also wants the federal government to look at “long-term revenue generating options including congestion pricing, carbon auctions, fees based on miles traveled, and – once t