American Jobs Act Would Create an Infrastructure Bank

President Obama’s American Jobs Act (the Act) includes many measures to revive a stalling economy, including a proposal to create a public bank—the American Infrastructure Financing Authority—that would invest in infrastructure. Designed to entice private investors, an infrastructure bank would be a key government entity for low-cost financing for infrastructure projects.

Even if the Act does not pass in its complete form, the infrastructure bank still merits the attention as an individual proposal because funding is not keeping up with the need for fixing our crumbling infrastructure. For instance, U.S. infrastructure fell from first to fifteenth place in the World Economic Forum’s economic competitiveness ranking since 2005.

I mentioned last week that 1) record-low interest rates on federal treasuries make now an especially cost-effective time to borrow and invest in infrastructure and 2) the unemployment rate in the construction sector has been in the double-digits for nearly three years. The infrastructure bank would lead to increased infrastructure investment, which in turn would spur competitiveness and economic growth through job creation and congestion relief.

Under President Obama’s proposal, the infrastructure bank would be headed by a Chief Executive Officer and a Board of Directors. These officials would select which public works to finance based on an analysis of the project’s economic, financial, technical, environmental, and public costs and benefits. The analysis would also consider revenue sources for the loan repayment, such as user fees and tolls.

Loans would be limited to projects with a price tag of at least $100 million in urban and suburban areas and $25 million in rural parts of the country. Financing for each project would be limited to 50 percent of the project’s total cost, and the loans could be financed for a period of up to 35 years. The financing would be available for transportation and other types of infrastructure projects, including highways, mass transit, rail, airports and dams, among others.

Some stakeholders object to private financing for public-works projects for different reasons, including the concern that the infrastructure bank may become a vehicle to create privatized public assets. To address these concerns, policymakers should ensure that the infrastructure bank properly balances taxpayer protection with investor returns and delivers benefits that are broadly shared among a wide array of citizens and stakeholders.

Moreover, it is beneficial to move beyond public-only financing of infrastructure in order to increase the total funding for critical infrastructure, speed up infrastructure projects, and improve the overall societal benefits that flow from such investments. The U.S. needs to invest in roads, highways, rails and other infrastructure if it is to remain economically competitive.

9 Comments

  1. Alex

    October 4, 2011 at 8:27 pm

    Nothing but a union giveaway just like the last one !

  2. Frances Jenkins

    October 5, 2011 at 5:49 am

    Just like the solar project in California, it is a way to repay supporters of Obama and the Democrat Party.

  3. Alex

    October 5, 2011 at 8:09 am

    Not only does he decide who gets the borrowed money, but now Obama decides who to drop a missile on without a trial. He is not a President, but a dictator.who hands out the booty to his friends.

  4. Rob Schofield

    October 5, 2011 at 8:44 am

    A note to our readers here at The PP:

    A lot of you have inquired of us lately as to whether “Alex” and/or “Frances Jenkins” are real people or simply spam names generated by some kind of crude software — perhaps developed by someone in the local anti-government network.

    Spamming is, of course, a constant challenge for blogs that allow public comment and something we try to do our best to monitor.

    In the case of “Alex” and “Frances Jenkins,” we wanted to take this opportunity to let you know that we are looking into this matter and hope to have a definitive report for you in the near future. At this point in our investigation, we have to tell you that the jury is still out.

    On the one hand, both “Alex” and “Frances” do provide some indicators of real personhood — both frequently post comments that can be described as “emotional” and/or “irrational” and that seem to “respond” to other comments.

    On the other hand, it’s also clear that the “substance” of the vast majority of comments posted by both entities is clearly of a kind that could easily be generated by a very basic computer program (in that they both invariably regurgitate hackneyed clichés and talking points while at the same time relying upon simplistic and inapposite references). Both also display frequent spelling and grammar errors of the kind that one sometimes associates with very rudimentary translations — perhaps from Russian or Chinese to English.

    Bottom line: We will continue to investigate the matter, but will for now continue to allow the two entities to continue to post on the grounds that they provide a form a comic relief for serious people discussing and considering serious topics.

    Please don’t hesitiate to notify us if you have suggestions regarding this matter.

    Sincerely,

    Rob Schofield
    Editor

  5. Ricky

    October 5, 2011 at 9:58 am

    Hmmm… there’s a difference between spammers and trolls.

    Rule 1 of Internet forum discussions: Don’t feed the trolls.

  6. david esmay

    October 5, 2011 at 2:34 pm

    I’ve always assumed that alex, frances, and frances jenkins, were three personalities inhabiting the same body, any way, they’re always good for a laugh. Alex once asserted, that because I’d signed in as dave instead of david one day, that I was somehow trying to shift my identity, or using an alias. Disturbingly funny, but I love their use of exclamation points!

  7. david esmay

    October 5, 2011 at 2:42 pm

    Alex, before you start calling anyone a dictator, I suggest you read the patriot act, or any statements made by Col. Larry Wilkerson, US Army ret., former personal attache to Colin Powell, as what went on during the previous administration.

  8. Alex

    October 5, 2011 at 5:01 pm

    I was quite amused by the sinister theories advanced so eloquently by Rob Schofield. I can’t speak for Frances, but I can assure your audience I am a live person living in the Triangle who often disagrees with your Progressive ideas, and especially your somewhat arrogant attitude. I hardly think having different viewpoints than your own qualifies me as an extremist. I vote as an Independent, hate big government, and believe that people are accountable for their actions. I voted for Clinton twice,was not fond of George Bush, and now believe that Obama is doing an absolutely awful job as president. What I find disconcerting about Progressives such as yourself is this strange “herd” mentality where you don’t question anything as long as it is proposed by Obama or some other Democrat whether it makes any sense or not. This closed mind mentality is so pervasive that a new norm is established, and anyone differing from this norm is considered to be a weird extremist.In my opinion, the country is much worse off because everyone’s thinking has become so rigid, and any form of dissent seems to encourage hostility and not conversation. Why have a forum if everyone says the same thing Mr. Schoefield ?

  9. gregflynn

    October 5, 2011 at 7:02 pm

    “Why have a forum if everyone says the same thing?

    I think that’s Rob’s point. To dismiss a jobs bill as “Nothing but a union giveaway” is not conversational, not questioning. It may be dissent but it’s also hostile and does not invite exploration. The ready accusation of a herd mentality is yet another absolutist statement that seems immune to copious refutation.