Last week, when announcing his plans for a new round of infrastructure spending to stimulate the economy, Obama reached back to 2008 to pull out a plank from his campaign platform. When campaigning on the economy, president Obama made the creation of a national infrastructure bank to fund projects of national significance an priority.
Until last week, it was a priority that took a back seat to issues like health care reform and ending the war in Iraq. Congressmen James Oberstar (D- MN) and John Mica (R-FL) tried to raise the idea as part of a surface transportation authorization act to renew the years-obsolete federal transportation authorization. This idea was squelched by the White House and Senate leaders who wanted to focus on other matters. Now, with elections looming and the potential for GOP control of congress come January, any type of infrastructure bank or surface transporation reauthorization does not have a good prognosis.
I think the infrastructure bank is a great idea, though, because it depoliticizes transportation spending. Transportation spending often takes the form of pork-barrel spending. Congressmen and Senators push projects in their home districts to 'bring home the bacon' to their constituents. Money spent in their district means more jobs and more prosperity for their voters, and come election season they can boast of the Ben Chandler train station or the Mitch McConnell interchange as contributions their political influence made to bettering the lives of the people in their district.
What pork barrel infrastructure leads to is projects like freeways to rural areas and bridges to nowhere. Airstrips in sparsely populated eastern Kentucky and rail lines in Wyoming. It also leads to projects with little conherence and coordination, like an unconnected freeway or commuter rail that drops commuters off at an airport at the edge of town. A central infrastructure bank could plan projects so that the country could get the greatest return for its investment and conditions would be right for a national intermodal transportation system to emerge.
A national infrastructure bank could also take pressure off of states dependent on large highway and commuter rail infrastructure. Illinois, New York, Ohio, New Jersey, Arizona, Texas, California and Florida have sagging budgets because past conservative administrations have passed down a legacy of infrastructure neglect that carries a heavy price tag. Well targeted federal investment from a vigorous national infrastructure bank would repair infrastructure to the point that economic activity could safely proceed without breaking the state treasury.
There are a few reasonable objections to the establishment of an infrastructure bank. Such an institution would sever the act of appropriating tax revenue from the officials elected in the House of Representatives. Constitutionally, one of the reasons our founding fathers entrusted the House with the powers of the purse was that they were directly elected by popular vote. Appropriations bills originating in the House carry the power of popular will behind them.
As a result, the infrastrucuture built by the proposed bank would not necessarily be the infrastructure that the people want. Then again, since the commercial needs of the country don't often run parallel to the individual desires of its citizens, this isn't necessarily a bad thing.
I can't imagine, though, that there won't be objections from congressmen who represent rural districts and their often conservative constituents. An infrastructure bank awarding grants to projects nationally would certainly distribute a much higher proportion of funds to urban areas where commuter networks, metros and freeways with high price tags are more of a necessity.
Despite its shortcomings, I think the national infrastructure bank would be a step in the right direction for the country to help rebuild and repair its crumbling pipes, roads, and rails. It would strip congress of the temptation to write pork legislation and target the projects that would serve the most people and do the most good. Hopefully the proposal gets some traction in congress.
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