Infrastructure bank could be part of jobs package
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President Barack Obama walks to the Rose Garden of the White House in Washington, Wednesday where he urged Congress to pass a federal highway bill.
WASHINGTON — A national infrastructure bank that would entice private investors into road and rail projects could be a major part of the jobs package that President Barack Obama hopes will finally bring relief to the unemployed.
The White House hasn't divulged the contents of the package that Obama is to unveil in an address to a joint session of Congress next week. But the president has pushed the idea of an infrastructure bank in recent speeches and has praised Senate and House bills that create such a government-sponsored lending institution.
Whether the bank, which would need time to organize, could have any real impact on the jobs situation in the coming year — and particularly before the November 2012 elections — is in dispute.
Obama seems to think it would.
"We've got the potential to create an infrastructure bank that could put construction workers to work right now, rebuilding our roads and our bridges and our vital infrastructure all across the country," he said at a news conference in July.
But Janet Kavinoky, director of infrastructure issues at the U.S. Chamber of Commerce, cautioned that "even in the next two years I don't believe the bank is going to be that kind of job creator."
The best way to spur job growth in the short term is for Congress to pass long-stalled bills to fund aviation and highway programs, she said.
The Chamber of Commerce strongly supports the infrastructure bank. Kavinoky said the United States is one of the few large countries that lack a central source of low-cost financing for construction projects. But she said it's going to take time to get it running and come up with a pipeline of projects where funds can be invested.
Sen. John Kerry, D-Mass., who's sponsoring an infrastructure bank bill, argued that "we have projects all across America that are ready to go tomorrow." He said the bank "could have money flowing in the next year easily."
Michael Likosky, senior fellow at the NYU Institute for Public Knowledge and author of "Obama's Bank: Financing a Durable New Deal," says he is working with transportation agencies in California and New York that "are waiting for the federal government to say they are going to support these projects."
A commitment to a national infrastructure bank could also provide a positive spark to financial markets and encourage investment, he said.
The bank would supplement federal spending on infrastructure by promoting private-sector investment in projects of national or regional significance. The private sector currently provides only about 6 percent of infrastructure spending.
Supporters, which range from the Chamber of Commerce to the AFL-CIO, say pension funds, private equity funds and sovereign wealth funds have hundreds of billions of dollars ready to be invested in low-risk infrastructure projects.
It's better than having pension fund money go to Treasury bonds, Likosky said. "It's really about changing our approach; we're in tough economic times and we will be for a while. We have to make sure the money we have goes further."
The Kerry bill would require $10 billion in start-up money from the government to get the first loans going and cover administrative costs. The bank would be government owned, run by a board of directors, independent of any federal agency and self-sustaining after the initial expense. Public-private partnerships, corporations and state and local governments would be eligible for the loans.
The bank's directors would pick which projects to finance based on an analysis of costs, benefits and revenue streams, such as from tolls or fees, for repaying the loan. Once the terms of the loan, including interest rates and fees to cover risk, are set, the Treasury Department would disburse the loan.
Urban projects would have to be at least $100 million in size, rural ones $25 million. The infrastructure bank's loan could cover no more than 50 percent of a project's costs.
"There is going to be a revenue stream for payback and therefore the project is going to stand on its own because it will be a good enough project to attract private-sector funding," said Sen. Kay Bailey Hutchison of Texas, one of several Republican co-sponsors of the Kerry plan.
Supporters estimate the bank could set up as much as $160 billion in government loans over a decade and anchor as much as $650 billion in projects.
In the House, Rep. Rosa DeLauro, D-Conn., has a similar bill that relies on $25 billion in start-up money and makes use of bonds as well as loans to stimulate construction projects. Both Kerry and DeLauro would cover transportation, water and energy projects.
DeLauro would also include communications projects. She says her bill is modeled after the European Investment Bank, which has been financing infrastructure projects for 50 years and last year invested more than $100 billion.
Obama, in his 2012 budget proposal, envisioned spending $30 billion to start an infrastructure bank within the Transportation Department that would provide grants as well as loans to transportation projects.
That idea drew opposition from the House Transportation Committee chairman, Rep. John Mica, R-Fla. He said in a recent article in the congressional newspaper Roll Call that it would be better to increase help for existing state infrastructure banks "rather than increasing the size of the bloated federal bureaucracy, as some advocate, by creating a national infrastructure bank."
Kerry pointed to a 2009 American Society of Civil Engineers report that said $2.2 trillion needs to be spent over five years to bring the nation's roads, bridges and water systems up to an adequate level. He said Congress needs to both pass a new highway bill and agree on alternatives like the bank.
"If we can leverage $650 billion and get money going in the transportation bill, we can begin to nibble away at the problem," Kerry said.
Sep 3, 2011 at 3:26 a.m.
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"Recovery summer, uh wait that ship has sailed."
.
Yeah, QE2 ENDED!
Markets, of course, sold off after it ended, and any rally now is based solely on rumors of QE3! NO WORRIES though...The worse the economic numbers get, the better the chances of QE3, because QE1 and 2 worked out SO GREAT....So great for corporate balance sheets that is! HAHA...
No problem that can't be fixed overnight via the feds printing press folks. QE3 will be soon to come..MUST keep the giant house of cards from totally collapsing!
Sep 3, 2011 at 3:20 a.m.
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Government jobs don't add any growth to the economy, as it is the private sector who is financing these jobs via the taxes they pay on their profits. The real problem is that the private sector is not hiring, because they are receiving MASSIVE corporate welfare in the form of easy $$$ from the fed. It will remain this way indefinitely, as the fed has all ready said they are going to keep this current policy going for at least 2 more years. Which will just simply CONTINUE to enable all the $$$ to flood to the top..Keep corporate balance sheets showing record profits, while they do NOTHING in the form of expanding, or hiring....No worries though folks, the fed is doing a great job. They keep telling you we are on the road to recovery...HAHAHA.
Sep 2, 2011 at 7:50 p.m.
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BebBe, we are already aware you are delusional.
Sep 2, 2011 at 6:11 p.m.
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You are right justmy414 this is what the republicans want no jobs. Doing their best to put people out of work. Look at all the public servant jobs gone. Thanks to the republicans.
Sep 2, 2011 at 5:18 p.m.
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That job report showed a huge LOSS of jobs, almost all of them government. That is EXACTLY what the republicans have wanted and worked for, so they got what they wanted. Working out well isn't it? The republicans are also the one's who threw a fit in raising the debt ceiling, creating a uncertain business environment which directly contributed to lack of business growth in the immediately preceeding month. So, REPUBLICANS get this job report laid directly on thier doorstep, this is thier plan.
Sep 2, 2011 at 3:34 p.m.
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bebe--You seem to think that you asked me a question and that I didn't answer it. Actually, I asked YOU, and YOU were afraid to answer. I know... You are a conservative...you can't be truthful and still answer to your masters.
Sep 2, 2011 at 3:32 p.m.
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It's waker, bebe. Not surprised you have to ask. You don't seem very intelligent. Or very courageous. I'm asking you now, but you don't have the guts to answer. Afraid to answer now, when you'd have to answer that johnson has become a very comfortable Washington insider who has no intention of helping anyone but himself.
Sep 2, 2011 at 2:32 p.m.
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bebe--Are you happy with the job johnson has done for the past 8 months? Can you please tell me what he has done, what he has accomplished in regard to keeping his campaign promises?
Sep 2, 2011 at 2:17 p.m.
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bebe--You're wrong again. The quote was a direct quote from President Obama on the day he signed the package. You can listen to the distortions of fox news and be gullible enough to fall for it if you want to, but you can't change the truth...even if you have permission from glenn beck and rush limbaugh.
Sep 2, 2011 at 11:57 a.m.
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Enjoy your day waker. I decline to fall for your bait. Have a great day! :)
Sep 2, 2011 at 11:51 a.m.
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http://www.cnbc.com/id/44370439
Sep 2, 2011 at 11:48 a.m.
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Recovery summer, uh wait that ship has sailed.
Sep 2, 2011 at 11:48 a.m.
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Well,bebe, both walker and johnson PROMISED jobs!! "I KNOW HOW TO CREATE JOBS," johnson blared over and over again during the campaign. Yet they have created none. johnson seems to have completely disappeared, living the high life of a Washington insider and ignoring his campaign promises and his constituents. THEY are the ones who made you and I false promises--where is your indignation with them? President Obama said exactly this when signing the stimulus package legislation: "We don't know if it will work or not, but we have to try something." NO promises. The broken promises came, as always, from the conservatives.
Sep 2, 2011 at 11:46 a.m.
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Jobs plan? I would be happy if they passed a budget once a year, but seeing that is not possible with the pitiful leadership in washington letting them pretend that "now" they have a plan to create jobs further shows their incompetence.
Sep 2, 2011 at 11:42 a.m.
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uncle--I think that in your own minds, you and don both think you are good people! That's the best one I've heard in a long time. You have both come on here in the past and just blasted me when my conversation was not even with you, and then you get mad when I respond. You and don are too blind to see that you leave the nastiest posts around, and you both scratch your heads in wonder when someone takes offense at your nastiness. It's only OTHERS' nastiness that you can see. Yet you are two of the meanest, nastiest posters on here.
Sep 2, 2011 at 11 a.m.
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Look at the hate and vitriol in your posts waker. You don't wish to discuss anything with any body. You appear to get a certain amount of pleasure calling people names and just attacking any opinion that doesn't coincide with yours. OOPS!!! I mean you're right. I am wrong. You're just one big ol' bright ray of sunshine. Have a great day.
Sep 2, 2011 at 8:32 a.m.
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uncle...You're a great one to talk...after blaming me the other day for the federal rules which regulate public assistance programs, and then being shwon what a fool you are, you cut and ran...ran off to your boat and hid in shame. Now you're back and blathering again. Beautiful!
Sep 2, 2011 at 8:29 a.m.
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Both sides have em....
Sep 2, 2011 at 7:05 a.m.
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There are a few others who are neck and neck in the race for most offensive poster. The republican/walker camp has some disturbed posters.
Sep 2, 2011 at 5:48 a.m.
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I agree donna.... waker is THE most unpleasant poster on here. BAR NONE....
Sep 2, 2011 at 4:42 a.m.
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Blah, bla, blah, don. Still looking for any posting you've ever put on here critical of repukes' manners. HYPOCRITE!!
Sep 1, 2011 at 7:24 p.m.
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waker...actually, I dont know how to read, will you teach me? And you are the one who started accusing of name calling and then you call me a "repuke". Sick! You need an anger management class.
Sep 1, 2011 at 5:47 p.m.
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don--I'm not begging people to talk to me, either. Do you know how to read? And why do you ONLY call Liberals out on things like this? You never have the guts to expose the "snide angry posts" of the repuke teabaggers on here.
Sep 1, 2011 at 5:18 p.m.
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waker...if you think noleftest has an attitude you better reread your snide angry posts!
Sep 1, 2011 at 4:33 p.m.
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noleftist can't understand why none of the people he constantly calls names want to talk with him. LOL Maybe it's because you are one of the most unpleasant people on this site. Or maybe it's because you have yet, in any of your posts, to say something intelligent. Whine all you want, people just don't like you--that's why no one will talk to you.
Sep 1, 2011 at 4:27 p.m.
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I'm leary of creating any more centralized gov't bureaucracies. Too much opportunity for sticky fingers and mismanagement.
Sep 1, 2011 at 3:21 p.m.
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I meant the company which couldn't get loans from a private company because they were too risky but did have a big investor who was a "bundler" (i.e. big donor) for President Obama.
With millions on the unemployment line and Obama mortgaging entire American family trees to the Chinese to support his big spending ways, we certainly don't need the government making corporate welfare loans to companies that are not viable that just ship jobs off to China like Solyndra did.
Companies need to find their own financing, not rely on the government. No more corporate welfare!
Sep 1, 2011 at 2:42 p.m.
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You mean the Solyndra loan that was first proposed by President Bush, then later also endorsed by Obama. The loan that when made was going to a company that had increased revenue 2,000 percent in the last three years. A loan to solar panel industry that ultimately found it hard to compete with China solar manufactures who recieved substantial financial assistance from the government. You also forgot to mention the two other solar manufacturers who filed for bankrupcy protection at the same time. If you are going to post something it should be factual, not just an editorial. Isn't that what you people celebrate. Loaning money to business is taking a risk, some pay off big and some do not. That doesn't stop people from investing. It's far better to just keep giving corporate welfare to the gas and oil business, at least we know we will never get a benefit from that.
Sep 1, 2011 at 11:23 a.m.
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Lots of lefties reading this string, none posting. They must not have a good answer to my question.
Sep 1, 2011 at 10:11 a.m.
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It sounds to me like another grab bag of cash for corporate America. JOY!
Sep 1, 2011 at 9:33 a.m.
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Will these loans work like the half billion in loans federal taxpayers made to the solar panel company Solyndra that just went under? You remember, the one that Obama said was "leading the way toward a brighter and more prosperous future?”
http://www.washingtontimes.com/news/2011...
It appears our lefty friends aren't against ALL corporate welfare, just against corporate welfare for un-PC ones (a.k.a. those that actually make money without government help.)
So I'm just wondering what would be different about this infrastructure bank. Maybe our lefty friends can inform us all. Should be enlightening.
Sep 1, 2011 at 9:28 a.m.
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http://jaredbernsteinblog.com/the-recove...
Sep 1, 2011 at 8:59 a.m.
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Yes, it will keep stupid State Governors from interferring.
Sep 1, 2011 at 8:24 a.m.
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And this will work as well as the PREVIOUS STIMULUS PLAN. Anybody want to buy a bridge in Brooklyn?
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