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Let's Bank on Rebuilding America
By Isaiah J. Poole
The Campaign for America's Future
Tuesday 06 May 2008
Instead of a silly argument over a "gas tax holiday," we desperately
need a serious discussion about the nation's infrastructure. And there is a
good legislative proposal that could be the basis for that discussion.
There are bills in the House (HR 3401) and the Senate (S 1926) that would create
a national infrastructure bank. It could be one way to bring some common sense
to the task of rebuilding America's roads, bridges, sewers and public buildings.
The creation of this bank should be part of the effort progressives are making
in Congress to enact a second stimulus bill this month.
Such a bank would allow the federal government to finance these projects in
the same way that states do: by issuing long-term, tax-exempt bonds or by making
loan guarantees.
Both Sens. Hillary Clinton and Barack Obama have said they support the idea
of an infrastructure bank, although it rarely comes up in their campaign speeches.
And that's a shame, because they both need to spend their time reinforcing an
emerging national mandate for repairing and improving our crumbling foundations.
Just last month, the blog Infrastructure Watch notes, the Government Accountability
Office estimated that the nation's total water infrastructure needs would cost
between $485 billion to $1.2 trillion. However, funding for the largest federal
drinking water and wastewater infrastructure programs have been flat or declining.
Also, the Congressional Budget Office told Congress last year that the Highway
Trust Fund, which is made up largely of the revenue from the gasoline tax, will
run out of money in 2009. Spending is outpacing money flowing into the fund.
(High gasoline prices, in fact, worsens that problem. When high prices force
cutbacks in driving, less money flows into the fund; the federal gasoline tax
is a per-gallon tax; it does not increase proportionately to the cost of a gallon
of gasoline.) One key reason for the exhaustion of the fund is that prices for
materials such as asphalt and concrete are exceeding the general rate of inflation.
In March, the president of the American Society of Civil Engineers, David G.
Mongan, reminded the House Banking Committee that in 2005 the organization gave
a grade of "D" to the state of the nation's infrastructure and said
that an investment of $1.6 trillion by 2010 would be needed to bring the fix
these public resources. At the time, that bad grade got a fair amount of attention.
Since then:
Nothing approaching that level of investment has been made.
Indeed, little has changed in the three years since we handed out that dismal
grade, and establishing a longterm plan to finance the development and maintenance
of our infrastructure remains a pressing national priority.
This nation continues to under-invest in infrastructure at the national level.
The total of all federal spending for infrastructure as a share of all federal
spending has steadily declined over the last 30 years, according to the Congressional
Budget Office.
One of the more shameful examples of what Robert Kuttner adroitly calls "the
squandering of America" is the failure of America to take care of its basic
public assets, especially after the Bush administration inherited a government
with a budget surplus that gave it the leeway to tackle that challenge intelligently.
Under the guise of controlling spending, the administration has shifted an increasing
share of the national burden to state and local governments - where the
same conservatives who say the federal government shouldn't tax to pay for these
needs make the same argument at the state and local level - or encouraged
turning public assets into private profit centers.
Now that the country is moving through a recession, there is an even more critical
need to target government resources on projects that will produce jobs in the
short run and leave the nation in the long run with the clean water, transportation,
schools and other public facilities that a nation needs to be healthy and economically
vibrant. As Congress considers a second economic stimulus package for short-term
relief this month, it should authorize the creation of that infrastructure bank.
Then let's have a serious debate about how to fund it and how to use it when
the next president takes office.
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