One of the buzzwords that the president and his fellow Democrats have been floating this past week is investment in “infrastructure” as the solution to flat economic growth and high unemployment rates. Wednesday on Fox’s The Five, leftist political analyst Bob Bechtel said that a National Infrastructure Bank would help put people back to work.
To be honest, I had never heard of the National Infrastructure Bank until I received an e-mail about it this week from my senator, Sherrod Brown (D-OH), the most liberal member of Congress. Brown proudly announced that he was trying to sell the scheme to business leaders in Cincinnati as a way to rebuild a crumbling bridge. Brown linked to an article in the Cincinnati Business Courrier that covered the meeting :
“Ohio Sen. Sherrod Brown assembled a group of business, labor and local government officials in Cincinnati Tuesday to voice support for new legislation that would create a national infrastructure bank to finance big-ticket projects like the Brent Spence Bridge….Brown’s proposal calls for projects of national significance to receive financing as long as they as they can demonstrate “an ability to repay the loan.”In an opinion piece in Thursday’s Wall Street Journal, former PA Governor Ed Rendell and Mesa, AZ Mayor Scott Smith are pushing the rebuilding of our infrastructure via a National Infrastructure Bank:
“It is also time we create new infrastructure financing options, including a National Infrastructure Bank. Many of these new programs, using Build America Bonds, for instance, can be paid for with a minimal impact on the federal deficit.
"The government’s continued neglect of infrastructure will consign our nation and our children to economic decline. Rebuilding America’s future cannot be a Democratic or Republican political cause. It must be a national undertaking.”Rendell and Smith write as representatives of Building America’s Future Educational Fund, which bills itself as “a bipartisan coalition of elected officials dedicated to bringing about a new era of U.S. investment in infrastructure that enhances our nation’s prosperity and quality of life.”
Alright, if by “bipartisan” they mean a collection of leftists and RINO’s which includes the likes of Michael Bloomberg, Arnold Schwazenegger, Gavin Newsome, Charlie Crist, David Patterson, and Ted Strickland. The Director of the Board is Donna Cooper from the Center for American Progress. Notice there’s quite a collection of out-of-work former Democratic office-holders on the list. Apparently their wives couldn’t handle having them wandering aimlessly around the estates all day.
So what exactly is this National Infrastructure Bank? Various iterations of it have been tossed around for the past several years. The basic idea is that a government bureaucracy would be set up to lend (or give) money out to fund infrastructure projects. Obama had a version in his 2011 budget announcement. Remember that “invest” is a code word for deficit spending:
“The Administration’s six year plan would invest $30 billion to found a National Infrastructure Bank (I-Bank). The I-Bank would leverage this Federal investment by providing loans and grants to support individual projects and broader activities of significance to our Nation’s economic competitiveness…A cornerstone of the I-Bank’s approach will be a rigorous project comparison method that transparently measures which projects offer the biggest “bang for the buck” to taxpayers and our economy. This marks a substantial departure from the practice of funding projects based on more narrow considerations.”Well, this all sounds very reasonable, doesn’t it? We all want safe roads and bridges. We all have images of the Minneapolis bridge collapse seared into our brains and recognize that our nation needs upgrades in our infrastructure.
But as often has happened with this administration, Treasury Secretary Timothy Geithner reveals the real motives behind this plan:
“That’s why the President’s plan will reform our current system to promote merit-based investment by creating a National Infrastructure Bank, which will select projects on the basis of rigorous analysis. The National Infrastructure Bank will also draw private capital to invest in American infrastructure so that we can better leverage scarce taxpayer dollars. We will support projects that produce significant returns on our investment, allow Americans more choices in their modes of transportation, and improve the interconnectedness of our existing transportation networks to maximize the value of our current infrastructure.
“…Eighty percent of jobs created by investing in infrastructure will likely be created in three occupations –construction, manufacturing, and retail trade – which are among the hardest hit from the recession. Nine out of 10 jobs created in these three sectors pay middle-class wages.” [emphasis added]Once again, the central planners are picking winners and losers. Not only are “three occupations” being targeted for specific consideration (union jobs, of course), but the “bank” will choose which projects have “merit” and thereby which “modes of transportation” will “produce significant returns on our investment,” all under the guise of giving us more “choices” in our modes of transportation (code for the continued push to get us all to “choose” public transportation).
But again, this isn’t necessarily all bad, until you actually read the legislation that has been proposed. It then descends into the usual Democratic pandering and central planning. H.R. 402, The National Infrastructure Development Bank Act of 2011, sponsored by Rep. Rosa DeLauro (D-CT) and 56 co-sponsors (all Democrats) was introduced in January and is currently in the subcommittee on Domestic Monetary Policy and Technology:
“Establishment of National Infrastructure Development Bank- The National Infrastructure Development Bank is established as a wholly owned Government corporation…”Oh no, here we go again. When you see the words “government” and “corporation” together beware. It brings to mind government takeovers of the banks, the auto industry and the student loan program.
“The Bank shall have a Board of Directors consisting of 5 members appointed by the President by and with the advice and consent of the Senate.” [emphasis added]The five members of the Board would have broad powers including:
"To make loans and purchase debt securities; to issue and sell debt securities of the Bank; to issue public benefit bonds and to provide financing to infrastructure projects from amounts made available from the issuance of such bonds; to make loan guarantees; to borrow on the global capital market and lend to regional, State, and local entities, and commercial banks for the purpose of funding infrastructure projects; to purchase in the open market any of the Bank’s outstanding obligations at any time and at any price; to monitor and oversee infrastructure projects financed, in whole or in part, by the Bank."The eligibility criteria for infrastructure projects receiving assistance from the bank must meet the goals of the Bank:
"IN GENERAL- The Bank shall conduct an analysis that takes into account the economic, environmental, social benefits, and costs of each project under consideration for financial assistance under this Act, prioritizing projects that contribute to economic growth, lead to job creation, and are of regional or national significance."And like nearly all legislation written by liberal Democrats, it rewards their special interest groups – those with the preferred skin color and gender and of course, the red carpet treatment for the beloved Mother Earth. It also adds the lofty goal of “inequality reduction,” which every good engineer should have foremost in his mind when designing a bridge. Some of the factors considered for transportation projects:
- Job creation, including workforce development for women and minorities, responsible employment practices, and quality job training opportunities.
- Reduction in carbon emissions
- Poverty and inequality reduction through targeted training and employment opportunities for low-income workers.
- Use of smart tolling, such as vehicle miles traveled and congestion pricing, for highway, road, and bridge projects.
The requirements are similar for energy and environmental projects. For telecommunications projects it also adds Obama’s goal of internet access for all:
The extent to which assistance expands or improves broadband and wireless services in rural and disadvantaged communities.
Once again, we have the federal government engaging in social engineering – this time calling it “infrastructure” and telling us it’s about building roads and bridges and the smart grid. But if you read the text of the legislation, the priority seems to be picking the winners and losers and deciding who is deserving of this piece of the American Pie and who is not.
Best of all, this bill puts $5 billion in capital into the capable hands of Treasury Secretary Tim Geithner:
"There is authorized to be appropriated to the Secretary for purchase of the shares of the Bank $5,000,000,000 for each of fiscal years 2012, 2013, 2014, 2015, and 2016 with the aggregate representing 10 percent of the total subscribed capital of the Bank":There is a similar measure percolating in the Senate, S. 652, Building and Upgrading Infrastructure for Long-term Development, sponsored by John Kerry (D-MA) and co-sponsored by six Democrats and Republicans Kay Bailey Hutchison (TX) and Lindsay Graham (SC). While not including the radical social engineering language of the House version, the 7-member Board, appointed by the president, has broad powers to approve projects which must meet:
“…any criteria established by the Board of Directors or chief executive officer in accordance with this Act.”Michelle Malkin summarized it this way:
“How would it work, and who would pay? Unveiled at the radical leftist Center for American Progress in January, Kerry and Company’s pipe dream would somehow leverage $10 billion in unidentified public funds into $640 billion in government loans and loan guarantees for union-exclusive construction and bogus green jobs projects. [T]he infrastructure banks would borrow more money the government doesn’t have to dole out grants that wouldn’t be paid back and don’t require interest payments.”In addition to bailing out banks, auto companies and the student loan industry and propping up state and local governments with stimulus money, our lawmakers are now considering bailing out states and municipalities that failed to plan for the future. They now want to take out million dollar mortgages on roads and bridges they can’t afford with money borrowed from the federal government that doesn’t actually have any money and is borrowing it from China. To…give everyone a job. You can’t make this stuff up.
Cross posted at Red State