The Thing About Expediency and an Infrastructure Bank

In yesterday’s speech before a joint session of Congress,President Obama called for new spending to help get the economy going again andto get Americans back to work. Putting aside the debate on how to truly fix theeconomy and how much of the fixing ought to be legislated by government, let’stake a look at one of the items the President offered as part of his overallsolution: a national infrastructure bank. As he said:

"And we’ll set up anindependent fund to attract private dollars and issue loans based on twocriteria: how badly a construction project is needed and how much good it woulddo for the economy."

Such a bank is no new concept. Besides inclusion in thePresident’s proposed FY 2011 budget, four pieces of legislation have beenintroduced in the 111th and 112th Congresses to establishgovernment borrowing entities for transportation, water, and energy projects.While a bill introduced by Congresswoman Rosa DeLauro (CT-3) would create awholly-owned government bank is worth noting, the President specificallymentioned a “Massachusetts Democrat”-supported bill, likely the BUILD Act,sponsored by Senator John Kerry (MA). BUILD would authorize $10 billion in newborrowing authority for infrastructure ventures, with a $2 billion real cost totaxpayers in start up expenses and loan guarantees. BUILD was highlighted inthe July 26th edition of the Taxpayer’s Tab. According toinformation provided by the White House, the bank under the President’s proposal wouldcost $10 billion over an undefined period of time. One would hope everyone willhave a better idea of the timetable once the bill is released to the public.However, it appears, the President’s new infrastructure bank proposed would requirea greater infusion of federal dollars than the plans supported by any member ofCongress, be it Democrat or Republican-controlled.

More to the President’s point, he touted the immediate needfor the provisions he outlined in his American Jobs Act, saying “right now”seven times in the address. Yet the establishment of a new bureaucracy to exclusivelyfunnel public and private dollars into projects creating and improving roadsand dams is no easy task. There are several steps to follow. Once thegovernment is authorized to create the bank (no small feat in the currentpolitical environment), personnel would have to be hired and offices set up,rules would be drafted, and money would have to be allocated and transferred todedicated accounts. THEN planning and loan applications would have to besubmitted and approved or denied with appropriate time tables of conductingfurther administrative actions, contracting of construction and designcompanies, and buying of building and support materials and machinery. Ratherthan “right now,” “near future” would be more accurate timetable under the bestof circumstances.

It would be foolhardy for Americans -- employed or otherwise-- to assume infrastructure jobs would be immediately available. Massiveconstruction projects take years to plan, let alone implement, start, andfinish. The jobs that would come would be turned out just as slowly. As Obamajoked about the first “stimulus,” “shovel-ready was not as shovel-ready as weexpected.”