July 22, 2011
Senators Examine Need for National Infrastructure Bank
The Senate Commerce, Science, and Transportation Committee held a hearing Wednesday on building American transportation infrastructure through innovative funding. The committee examined the means by which federal funds can be used to leverage and partner with private-sector capital to supplement existing transportation funding and increase overall investment.
Witnesses stressed to the committee the importance of creating a national infrastructure bank during Wednesday's hearing on "Building American Transportation Infrastructure Through Innovative Funding." The Obama administration has asked Congress to create a bank as part of its budget requests.
"The infrastructure bank -- which would provide grants, loans, loan guarantees or a combination thereof to the full range of passenger and freight transportation projects in urban, suburban, and rural areas -- marks an important departure from the federal government's traditional way of spending on infrastructure through mode-specific grants and loans," said Polly Trottenberg, assistant secretary for transportation policy at the U.S. Department of Transportation, according to testimony excerpts released by the committee. "By using a competitive, merit-based selection process and coordinating or consolidating many of DOT's existing infrastructure finance programs, the infrastructure bank would have the ability to spur economic growth and job creation for years to come."
Committee Chairman Jay Rockefeller, D-West Virginia, said there are more than 90,000 miles of highways in need of rehabilitation nationwide and more than 70,000 structurally deficient bridges.
"We must rebuild and invest in the infrastructure that so many Americans depend on," Rockefeller said. "This is why I introduced legislation to create a transportation infrastructure investment fund that would leverage federal dollars and encourage private investment into our transportation network. It's an investment that can create much-needed construction jobs, manufacturing jobs, and engineering and design jobs for out-of-work Americans and, at the same time, support our nation's competitiveness."
Witnesses from the finance sector stressed the need for the government to attract private capital into the financing of infrastructure improvements.
"The need for investment in our nation's infrastructure is significantly larger than any one revenue source, and there is a need to design policies to access different revenue sources while being good stewards of the nation's infrastructure and meeting the challenges its current condition presents," said Robert Dove, managing director of Carlyle Infrastructure Partners. "A national infrastructure bank is one method by which private investment can serve as one of those revenue sources. Coupled with genuine reform, the bank could provide needed funding for our national infrastructure."
Perry Offutt, managing director at Morgan Stanley, said the United States is behind other countries when it comes to supporting a national infrastructure bank.
"While states and local governments are pursuing initiatives to address the U.S. infrastructure crisis such as implementing [public/private partnership] legislation, the federal government should develop a long-term plan for development and maintenance of the country's infrastructure as has been done successfully by other countries. A national infrastructure bank would be a key part of such a plan."
Other witnesses at Wednesday's hearing were Steve Bruno, vice president of the Brotherhood of Locomotive Engineers and Trainmen; and Pete Ruane, president and CEO of the American Road & Transportation Builders' Association.
Witness statements, an archived webcast, and more information are available at 1.usa.gov/
http://www.aashtojournal.org/Pages/072211scstc.aspx
