Senator John Kerry of Massachusetts and Republican Kay Bailey Hutchison of Texas proposed legislation today that would create a new infrastructure bank to help finance roads, bridges and other projects, an idea that has percolated for years but has never gained widespread support.
"Reliable, modern infrastructure isn't a luxury -- it's the lifeblood of our economy, the key to connecting our markets, moving people, products, information and energy, and the key to generating and sustaining millions of jobs for American workers," he said.
The legislation would provide loans and loan guarantees for bridges, rails, roads and other infrastructure projects through an independent entity called the American Infrastructure Financing Authority, which would be similar to the Export-Import Bank.
The concept is hardly new. Almost 20 years ago, a Congressional commission recommended a similar concept; the chairman of that panel sat in the front row, holding a worn copy of the commission's 1993 report. Lawmakers have pushed similar infrastructure funds over the years, and President Obama promoted it during the 2008 presidential campaign.
But the new proposal is different, Kerry said. With only loans and guarantees, and no grants, the bank will not be a drain on the treasury beyond the original investment. It would also be far smaller than other proposals, reflecting the political reality of the day, he said.
"We have been supersensitive to all of the kinds of hurdles that traditionally this kind of an effort would have to get over," he said. "It will not be appropriated money, because we don't have that money today, because of the debt and deficit we have and the other priortities."
The authority would initially be financed with $10 billion from the federal government but would become self-sustaining, leveraging as much as $640 billion in private funds over 10 years. It would not be allowed to finance more than 50 percent of the costs of projects.
Kerry announced his plans to propose the infrastructure bank last fall, telling the Senate Banking, House and Urban Affairs Committee that "well functioning infrastructure is not a luxury." He reiterated that call in January at a speech at the liberal-leaning Center for American Progress, saying that growth was tied to infrastructure.
Illustrating the breadth of political support for such a plan, the noon press conference include two men who are often adversaries, but occasional allies: U.S. Chamber of Commerce President and CEO Thomas J. Donohue and Richard Trumka, president of the AFL-CIO labor federation.
Donohue lamented the nation's decaying transportation infrastructure and its effect on the economy.
"We have a system that’s got to be updated, we’ve got a way to do it, and we came up here today to support the idea of the bank," he said.
About Political Intelligence
Glen Johnson is Politics Editor at boston.com and lead blogger for "Political Intelligence." He moved to Massachusetts in the fourth grade, and has covered local, state, and national politics for over 25 years. E-mail him at firstname.lastname@example.org. Follow him on Twitter @globeglen.