House Subcommittee Hearing Focuses on Proposed Infrastructure Bank (AASHTO)
A national infrastructure bank would help address the challenges of how to pay for maintaining and improving the nation’s infrastructure and do so at a relatively low cost to the federal government, according to several speakers at a recent House subcommittee hearing.
The May 13 hearing by the House Select Revenue Measures Subcommittee drew the governor of Pennsylvania, the mayor of Los Angeles, and several other officials to testify on the creation of a federally funded financial institution that would channel public and private money toward infrastructure projects.
“Now would be a good time to lay the groundwork for significant infrastructure improvements,” said subcommittee Chairman Richard Neal, D-Massachusetts. “With bridges crumbling and cities boiling water, we have received the message that America’s infrastructure is desperately in need of support.”
While other subcommittee members were generally supportive of infrastructure funding, several of those at the hearing expressed reservations about provisions to raise revenue for an infrastructure bank or similar financing mechanisms.
Rep. Paul Tiberi, R-Ohio and ranking minority member of the subcommittee, said “additional spending doesn’t come without a cost.” Other subcommittee members questioned the political will at this time to enact tax increases to fund infrastructure improvements.
House Highways & Transit Subcommittee Chairman Peter DeFazio, D-Oregon, testified that an infrastructure bank would have only limited impact on the current challenges facing the nation.
“In these tough economic times, we must look at new and innovative means to improve our nation’s deteriorating transportation system and an infrastructure bank is one small part of the solution,” he said.
DeFazio also stressed the creation of an infrastructure bank right now would not make any sense without a comprehensive multiyear reauthorization of the federal surface transportation programs.
Rep. Rosa DeLauro, D-Connecticut, testified regarding a bill she is sponsoring that would create an infrastructure bank.
“The bank would objectively review projects and provide financing for those of significance with clear economic, environmental, and social benefits,” she explained. DeLauro also underscored that her legislation, HR 2521, “is not a silver bullet, but rather an important way in which we can supplement other federal programs, which simply cannot make up for this infrastructure investment deficit without additional funds.”
Pennsylvania Gov. Ed Rendell also voiced strong support for a national infrastructure bank.
“We need a single entity that can leverage dollars from state and local governments or the private sector, can focus on projects of regional and national significance, will remove politics from the process, subject all requests to a benefit/cost analysis, and do all of this in the brightest of sunlight, openness, and transparency,” he said.
Villaraigosa Explains Effort to Accelerate Transit Construction
Los Angeles Mayor Antonio Villaraigosa highlighted his own city’s 30/10 Initiative — which entails securing sufficient funds to speed up a 30-year transit plan so that it can be completed in just a decade –as an example of a project that could benefit from a national infrastructure bank. The 30/10 Initiative is being financed by Measure R, a half-cent sales tax approved by Los Angeles voters in 2008.
“As Congress continues its important focus on stimulating the U.S. economy, we believe an infrastructure bank or investment fund could play an important role in helping sponsors of major public transportation investments capitalize, literally and figuratively, on local revenue streams,” Villaraigosa said. “In this way, Congress could encourage state and local governments to invest in the transportation infrastructure that is essential to maintaining the competitiveness and sustainability of the U.S. in the 21st century and enable the federal government to leverage its resources strategically.”
Other witnesses included Samuel Staley, director of urban and land use policy for the nonprofit think tank Reason Foundation. He conceded that the creation of a national infrastructure bank is “an attractive option,” but also emphasized the need to closely monitor such an effort and keep its mission focused and clear.
Robert Puentes, director of the Brookings Institution’s Metropolitan Infrastructure Initiative, told the subcommittee “that while a national infrastructure bank is not a panacea, if appropriately designed and with sufficient political autonomy, it could improve both the efficiency and effectiveness of future federal infrastructure projects of national and regional importance.”
After the hearing, Rendell told reporters that Congress must consider the consequences of not raising revenue for infrastructure and allowing it to deteriorate further.
“The longer we wait, the more expensive it gets,” he said.
Statements from Neal and all of the witnesses, as well as archived videos from the hearing, are available at tinyurl.com/May-13-Hearing.
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