By Nancy Spannaus
July 21, 2021—Over the last few months, legislators in five states have passed Memorials to Congress urging the passage of a $5 trillion National Infrastructure Bank (NIB), as outlined in the current House Bill 3339. Both houses in Maine, Nevada, and Rhode Island have endorsed such legislation, and sent their resolutions on to Washington, D.C. The Illinois House and New Jersey Senate have also passed Memorials.
More progress can be expected soon. Legislators in 11 other states have introduced resolutions in favor of a National Infrastructure Bank based on the capitalization of Federal Treasury bonds, rather than new taxes. The most recent Memorial was filed July in Michigan (SR77) on a bipartisan basis. In Pennsylvania, sponsors of HR113 from both parties have formed a caucus to agitate for passage of the resolution.
The states where NIB memorials have been introduced (in alphabetical order) are: Alabama; Alaska (SJR14); Arizona (SM1002); Georgia; Illinois (HR20); Maine; Michigan; New Jersey; Nevada; New Mexico (SM2); North Carolina (HR266); Ohio (HR19); Pennsylvania; Rhode Island; South Carolina (HR 3434); and Virginia (HJR 550).
Beyond the Legislatures
These legislative actions don’t begin to capture the momentum which is building for establishing a national infrastructure bank based on the principles which were applied by Presidents Washington, John Quincy Adams, Lincoln, and Franklin Roosevelt.
Over the past two years, civic groups, labor unions, county government bodies, and city councils throughout the nation have passed resolutions for the NIB, and are actively pursuing their Congressmen and other activists to get action on what they see as a life-or-death issue for their communities and citizens. The full lists are available on the website of the NIB coalition.
And those lists are impressive. For example, the city councils which have passed NIB resolutions include those of Pittsburgh and Philadelphia, PA; Cleveland, Akron, and Toledo, OH; Providence, RI; and Trenton, NJ.
No End in Sight
Even if current efforts to pass a bipartisan infrastructure program were to miraculously be revived, our nation will continue to see bridges collapse, drinking water polluted, power system blowouts, and transportation bottlenecks wasting endless time and money. The NIB Coalition rightly insists that its proposal for a publicly backed commercial bank dedicated to infrastructure alone is an absolutely essential complement to any other measures Congress is currently contemplating.
Current proposals are not only too small, but they continue to lack any workable plan for financing the necessary trillions of dollars in investment. Proposals being floated amount to one accounting trick after the other, in addition to taking money from other appropriations (including unemployment funds!) and launching public-private partnerships of the sort that lead to rip-offs of the public coffers, high user fees, and very little infrastructure. Critical projects such as the New York-New Jersey Gateway Project, which aims to replace vital transportation arteries more than 100 years old, are not included.
Nor is this simply the fault of fiscal conservative Republicans. The Democratic Party leadership has locked Congress into this situation with its insistence on Paygo, a budget-balancing system which denies the fundamental principles behind capital spending, and virtually rules out long-term infrastructure investment.
On the contrary, HR 3339, introduced by Illinois Rep. Danny Davis at the end of March, would provide up to $5 trillion in credit, using the methods pioneered by the Presidential Administrations which were responsible for our infrastructure booms. Federal credit, in the form of Federal Treasury bonds, are the key. While the $5 trillion figure may seem daunting, even that amount probably won’t adequately do the job of both repair, and technological upgrades to our nations’ transportation, water, and energy systems.
For example, current Federal plans don’t include any investment in high-speed rail, a vital component of boosting our nation’s connectivity, both economically and politically. Yes, the price tag for such a project is hefty, and with reasonable policies (including a long-term funding source), it could probably be reduced. But to focus on the dollar amount, as NIB Board member Stan Forzcek has often stated, is to ignore what’s important: creating a better future for our fellow citizens. Without the investment, we are looking at one disaster after another. With it, as history has shown, we will create much more wealth (even in dollar terms) than we have invested.
Investment in infrastructure has been shown to have a pay-back ratio of up to 7 to 1, as well as create millions of skilled, well-paying jobs. It has to be the right kind of infrastructure, of course—not simply patching holes in highways or retrofitting buildings. But if investment in high-speed rail, small modular nuclear reactors, and nuclear desalination (just to mention a few examples) are in the mix, there will be a boom in productivity and real wealth unlike what we’ve seen in this country for many decades.
Do we have to wait for this next headline grabbing infrastructure disaster to pass an effective national infrastructure bank? That depends upon how rapidly the NIB Coalition can grow, and get Congressmen to look beyond their short-term election prospects, toward the prosperity of the nation today and in future generations.
Nancy Spannaus is the author of Hamilton Versus Wall Street: The Core Principles of the American System of Economics.[better_recent_comments]