Infrastructure Bank Needs More Than a 'Drop in the Bucket'
"The leading vehicle is S. 1926, introduced last summer by Sen. Chris Dodd (D, CT) and Chuck Hagel (R, NE). It would "target large capacity-building projects not adequately served by current financing mechanisms" including "mass transit systems, housing properties, roads, bridges, drinking water systems, and wastewater systems." The NIB would be set up as an independent government entity, modeled after the Federal Deposit Insurance Corporation, with a five-member board of directors appointed by the President and confirmed by the Senate. Minimum federal investment per project would be $75 million. The legislation calls for the bank to issue $60 billion in long-term (up to 50-year) bonds."
"My initial reaction to this proposal is 'Huh?' There's no question that this country has not been investing enough in either rebuilding and modernizing existing infrastructure or adding much-needed new capacity. But is a new federal entity of this sort a sensible response?"
"One clue that this is mostly smoke and mirrors is the paltry $60 billion amount. With estimates of infrastructure funding shortfalls at or above a trillion dollars, this seems like the proverbial drop in the bucket."