Infrastructure Bank / News Shorts

Support Grows for New Infrastructure Bank Bill

By Nancy Spannaus

June 23, 2020—H.R. 6422, the new National Infrastructure Bank bill filed March 31 by Illinois representative Danny Davis, is picking up significant support. Spearheading the effort are representatives of organized labor, who have garnered endorsements in Ohio, New York, and Virginia. A resolution (H.R. 348) calling on Congress to pass the bill has also been introduced into the Ohio State legislature.

Support Grows for New Infrastructure Bank Bill

Bridges like this one over the Potomac River show why we need a National Infrastructure Bank.

H.R. 6422, which has been cosponsored by Rep. Seth Moulton of Massachusetts, is unique among infrastructure bills, in that it would authorize spending of up to $4 trillion based on capitalization of existing U.S. Treasury debt (i.e., no new debt required). (For elaboration on the Hamiltonian nature of the proposed bank, click here.)

This model is derived from the history of national banking in the United States, ranging from the Washington Administration to FDR. The overall concept has been the subject of memorials in 17 state legislatures, as well as endorsements by city councils and many civic organizations, including the National Association of Counties and the National Congress of Black Women, among others.

Virginia Democrats issue call

The drive took a major step forward over last weekend with the endorsement of a National Infrastructure Bank by the State Convention of the Virginia Democratic Party. The Virginia resolution for a “21st Century Infrastructure Bank” reads as follows:

Whereas,

Modernization and repair of our nation’s infrastructure is a key to restoring our economic growth that has remained largely stagnant for the last decade. In fact, Infrastructure spending has fallen to 2.5 percent of our GDP, the lowest level in 70 years.

Over our nation’s 240-year history, investment in infrastructure has accelerated when a national infrastructure bank (NIB) has been in place. There have been four such banks, the last of which was Franklin Delano Roosevelt’s Reconstruction Finance Corporation (RFC, 1932-1957). From coast to coast, these banks financed the construction of roads, bridges, canals, the Trans Continental Railroads, schools, affordable housing, rural cooperatives, and other “internal Improvements”; lifted us out of the Great Depression; and helped us to win WWII.

The American Society of Civil Engineers (ASCE) reported in 2017 that we need $4.6 trillion just to repair the nation’s infrastructure – roads and bridges, the power grid, schools, dams and levees, water and wastewater facilities, airports and rail, and public parks and recreation – of which at least $2.1 trillion is not funded.

A National Infrastructure Bank (NIB), modeled on the four previous banks in our nation’s history, would create a government-owned bank that would lend up to $4 trillion to state and local governments to repair and upgrade public infrastructure in every part of America.

• At $4 trillion, Is Adequately Sized to Finance Projects In Every State: It would yield less traffic congestion and CO2 pollution; lead-free water; new schools, affordable housing, mass transit, broadband everywhere; repair roads and bridges, electricity grids, provide new rail including High Speed; and more.

• Operations: Is capitalized with existing, privately owned U.S. Treasury Bonds, exchanged for preferred stock paying an extra 2%; creates working cash to fund loans just like commercial banks; provides low interest loans, and maintains public management of infrastructure, both lowering total project costs.

• Workers: Creates 25 million new jobs, paying Davis-Bacon wages; re-hires from among the 33 million Americans now unemployed; provides training in permanent, new, construction and related occupations; reduces income inequality; and stimulates union membership.

• Businesses: Creates more business from all the new construction; the economy is more productive; trucks move faster; and there is increased consumer demand for products and services that businesses provide.

• Economy: Ramps up jobs and production coming out of the pandemic collapse; pushes up long-term growth from 1.8%/year, to 5%/year (based on past performance and recent computer modeling).

• Federal Budget: Creates no new Federal Debt; requires no new Taxes; is not dependent on Pay-As-You-Go financing from budgets; no other infrastructure or jobs proposal is budget neutral like this one.

• State and Local Finances: New jobs and economic recovery/growth improve local finances much faster compared to the 2008 Recession. Only a large NIB is capable of rebuilding American infrastructure, creating millions of long-lasting jobs, and lifting us out of this deep recession.

Therefore, be it resolved: the Convention:

1. Endorses a 21st Century National Infrastructure Bank along the lines outlined in this Resolution; and 2. Urges the Virginia Congressional Delegation to introduce a bill for a 21st Century National Infrastructure Bank during the 116th United States Congress, and lead the effort to secure its passage.• (edited version)

 

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