Of Special Interest
16th August 2011
Rethinking of US infrastructure bank
President Barack Obama's plan for a new federal infrastructure bank in order to assist infrastructure projects and stimulate growth has not been welcomed by many Republicans in its current form. Instead it is seen as yet another example of a project that will increase federal debt and encourage wrong attitudes. Some Republicans are also annoyed at what they view as delaying tactics by the White House in putting forward a Highways Bill.
If the plans are to make it through Congress the format is likely to have to change significantly. The original proposal was to provide the infrastructure bank with $30bn in funding and to allow it to issue grants, loans and 'other financial tools'. Some Republicans are saying they might support a proposal for a bank with sub-$10bn funding if it were not to issue grants (branded federal give-aways), investing only in projects at least 50% private funded and in projects with a revenue stream - most likely through tolls.
A move to the use of such a bank, as opposed to a new highways bill is also viewed by some as further centralisation and likely to cause an increase in bureaucracy and the politicisation of decisions rather than based on evaluation of the public benefit. The Democratic party deny these suggestions and say the proposed bank's lending decisions would not be politically influenced.