Hutchison, Kerry legislation would create infrastructure bank

Bank would finance roads, rail

Marci Gilbert, Mar 15, 11.

Democratic Sen. John Kerry (Mass.) and Republican Sen. Kay Bailey Hutchison (Texas) will introduce bipartisan legislation later this week to create a federal infrastructure bank to fund road and rail projects around the nation, according to a story in The Hill.

With the highway trust fund running short of cash and the federal budget running large deficits, lawmakers and the Obama administration are looking for ways to pay for improving the nation’s aging infrastructure while getting new projects off the ground. Lawmakers are discussing public-private partnerships that can propel multiple modes of transportation such as improvements to highways, bridges, airports, railways and ports.

“These are strictly loans — not grants — for commercially viable projects,” Senator Kerry told The New York Times. “The federal government does no more than 50 percent of the loan. We expect that to leverage $600 billion or so in infrastructure investments over time.”

Sen. John Thune (R-S.D.) has urged caution in going forward with an infrastructure bank, arguing that it would likely benefit large cities and leave out rural areas.

Transportation Secretary Ray LaHood also touted the proposed national infrastructure bank, which would receive $30 billion over six years as part of a proposed comprehensive six-year, $556 billion plan.

With funding sources tight, senators in both parties have expressed frustration with the administration for failing to provide other ways to pay for the plan.

The Obama administration also has said it supports reviving the Build America Bonds (BAB) program, and the initiative could gain broad support if it’s focused on infrastructure.

Sen. Ron Wyden (D-Ore.) is leading the push on BAB and recently said he has a bill nearly ready to introduce. The measure would be called TRIPS, an acronym for Transportation and Regional Infrastructure Bonds.

Wyden is trying to build support for the bonds although there’s still plenty of Republican opposition. Some House and Senate Republicans though have said they’d consider supporting the program if it were focused solely on transportation.

Issuers sold more than $180 billion in BABs after the program started in April 2009, which Wyden called “a breathtaking sum.”

Sources: Grist.org
The Hill