Infrastructure Bank Going Nowhere in House

Transportation and Infrastructure Committee Chairman John Mica convened a hearing yesterday on President Obama's proposal to create a national infrastructure bank, and opened the event by making the situation perfectly clear.

"I'm afraid that the national infrastructure bank is dead on arrival in the House," he said.

There followed two hours of testimony from four out of five witnesses on why the bank makes no sense: It's expensive, it takes too long to set up, it adds bureaucracy, and its purpose is better served by programs that already are in place.

The bank is one element of the jobs bill Obama is pushing. Based in part on a Senate proposal by Democrats John Kerry and Mark Warner and Republican Kay Bailey Hutchison, it would provide $10 billion to leverage private and public investment in regional and national infrastructure projects.

The infrastructure bank also has been discussed as a possible provision in the next federal highway program.

As Mica made clear, the House has no interest. There's more support on the Senate side, where Barbara Boxer, D-Calif., chairman of the Senate Environment and Public Works Committee, has said she wants to have an infrastructure bank. So far, however, such a provision is not included in the Senate's draft legislation.

The sole proponent of the bank among the witnesses at yesterday's hearing, Scott Thomasson of the Progressive Policy Institute, remarked that the Republican reaction to the proposal is a symbol of partisan divide in Congress.

Thomasson noted that business leaders, including the U.S. Chamber of Commerce, support the bank.

"A properly structured national infrastructure bank is an innovative and sound investment tool that represents the next step in the evolution of federal financing programs for transportation, energy and other infrastructure projects," he said in his statement.

The Republican majority on the committee, and the other witnesses, think it makes more sense to improve current financing methods such as state infrastructure banks and the Transportation Infrastructure Finance and Innovation Act federal credit program.

"Rather than create a new national agency, send the money to the states," said Mica. He said 33 states already have infrastructure banks, and most don't have enough money to finance them.

Rep. Peter DeFazio, D-Ore., said the bank would not be a cure-all for transportation funding but would be a welcome addition to the mechanisms that already are in place. The infrastructure bank would be useful for large projects that generate a revenue stream through tolling or some other mechanism, but it won't help pay for work such as pavement restoration on Interstate highways, he said.

A different take on the issue came from Rep. Michael Capuano, D-Mass. He challenged the entire concept of using private financiers to leverage federal money. It's an expensive way to build infrastructure because the financier has to get his profit, he said.

"We're having this fight because we don't have courage or fortitude to raise money through gas taxes or tolls," he said. "We'd get a bigger bang for the buck to simply raise taxes."

Capuano acknowledged that his approach is not going to prevail, but added that he had fun saying it.