Building America’s Future Co-Chair Ed Rendell Testifies Before the Senate Finance Committee
A National Infrastructure Bank will end the cycle of inactivity and financial negligence
WASHINGTON, DC— Building America’s Future co-chair and former governor Ed Rendell testified today before the United States Senate Finance Committee to encourage lawmakers to create a National Infrastructure Bank (NIB) that would objectively invest in a variety of important projects in urban and rural regions.
In his testimony, Rendell said, “A properly constructed Bank will take the politics out of the equation and invest in projects based on merit and help to finance critical projects of regional or national significance. Right now, if multiple states wanted to complete a project crossing multiple jurisdictions or infrastructure sectors, there is no singular place to which they can apply for financial assistance.
“A National Infrastructure Bank can fill that void by leveraging dollars from states and local governments as well as the private sector, focusing on projects of regional or national significance, and subjecting all requests to a benefit-cost analysis. Clear accountability and transparency requirements would be part of the process.”
Rendell, on behalf of Building America’s Future, outlined the following basic concepts:
• Establish the Bank as an independent entity with the greatest flexibility to finance and fund only projects of regional and national significance.
• Allow the Bank to fund projects beyond just transportation such as ports, drinking and waste water, electrical grid, and broadband.
• Enable merit-based selection of projects by experts so that the most critical and feasible projects proceed by employing benefit-cost analysis methods.
• Ensure federal assistance at a significant enough scale to make these major projects financially viable.
• Ensure that the Bank has the authority to employ a range of finance and funding tools including, but not limited to: grants, credit assistance, low interest loans, tax incentives, Build America Bonds, Private Activity Bonds, enhanced TIFIA authority, and others to be determined.
• Create a method for leveraging public investments with private capital.
• Establish clear performance measurement standards such as completing projects on time and within budget, reducing traffic delays for passengers and goods movement, reducing carbon emissions, and improving safety.
• Provide project expediting capability by eliminating redundancies to speed completion of projects while still ensuring the environment remains protected.
The United States currently faces an aging infrastructure that resulted in 3.9 billion gallons of fuel wasted in 2009 due to traffic congestion, drinking water utilities that will need to invest $334.8 billion over the next 20 years to continue to provide safe and sufficient water to the public, and America’s poorest households spending more than 40 percent of their take-home pay on transportation needs.
To address these issues and many others, Rendell said, “Our hope is that if the National Infrastructure Bank is capitalized at the right level the Bank will make significant progress towards addressing some of the larger projects and outstanding needs in the country while Congress moves forward with significant reforms of existing funding silos, policy decisions, and the creation of a national vision.”
There are currently several bills that have been introduced in Congress calling for the creation of a NIB and President Obama proposed the creation of a similar entity in his FY 2010, 2011 and 2012 budgets.
The Congressional Budget Office has estimated that direct well-targeted government spending of $185 billion a year on infrastructure would generate economic and social benefits that would exceed the cost.