As I mentioned earlier, Oregon Congressman Pete DeFazio will be the next chair of the House Transportation and Infrastructure Committee. He's about to have a lot on his plate, since infrastructure may be one of the few places Trump will be able to work together with congressional Democrats to accomplish something... anything. Trump's own plan is just an enrichment scam for his Wall Street amigos, so Democrats are going to have to come up with something that will look good for Trump's populist peanut gallery. It's doable, as Leo Hindrey, Jr.-- a highly successful businessman and author of It Takes a CEO: It’s Time to Lead with Integrity and he Biggest Game of All-- wrote in a piece for the Washington Monthly: How Democrats Can Affordably Fix America’s Infrastructure. DeFazio has said that Trump "gets it" because his "is a builder." God only knows what DeFazio was smoking.
Since Inauguration Day, the Trump administration’s infrastructure plan has been a one trillion dollar “public private partnership,” funded with $200 billion from Congress and with $800 billion in loans from Wall Street institutions like Goldman Sachs and Blackstone. The $200 billion paid by Congress would be quickly spent. But Wall Street says it would demand an annual interest rate of 10 to 12 percent on their loans. Getting a return on these large, Wall Street-funded infrastructure projects would be very expensive. It would be so expensive, in fact, that the women and men intended to use these new rail lines, benefit from new broadband networks, cross repaired bridges, or fly out of upgraded airports won’t be able to afford to do so.Trump’s plan is a slap in the face to the mayors and governors who have been waiting decades for help funding infrastructure projects that their constituents need. Even if it weren’t prohibitively costly for communities, Trump’s plan doesn’t provide the full $1.5 trillion which the American Society of Civil Engineers (ASCE) believes is outside the current capabilities of the states and municipalities. Trump has proposed a half-baked half-measure which won’t affordably solve our current problems, let alone address our future needs.But while the nation’s infrastructure needs are great, they are not an emergency. Our infrastructure must be fixed in a timely matter, but not necessarily tomorrow. Democrats don’t have to settle with Trump on a bad plan, and they shouldn’t. They can instead push for a lasting solution. And thankfully, the party already has one in mind: an infrastructure bank.As a term, “infrastructure bank” might sound boring. But the idea can be elegant and ingenious. The federal government first establishes a bank and seeds it with billions of dollars–a lot of money, but still only a small fraction of what Trump is proposing. Next, the bank invites outside investors to add more money–orders of magnitude more than what the government provided. The bank would then finance infrastructure projects across the country, so long as they pay for themselves over time through user fees or associated taxes. States or cities could apply to fund projects ranging from passenger trains and toll roads to electricity grids and sewage pipes. And unlike Trump’s proposal, an infrastructure bank would not be a one-off funding initiative. Rather, once seeded, it would be self-sustaining, as loan repayments from earlier projects allow the bank to lend money for future ones.Every administration since Ronald Reagan’s has at least talked about a national infrastructure bank, and both Bill Clinton and Barack Obama initially pushed to create one. So why hasn’t it happened? For starters, it’s difficult to establish a bank structure that fully respects Congress’ right to appropriate but doesn’t unduly politicize project selection and project oversight.Some people believe that Congress would be able to fairly and efficiently manage these decisions, but I’m not one of them. Members of Congress are very able to decide what they want funded. But they would be less focused on selecting good projects and more likely to select ones which favor their own region or political views on infrastructure.I believe that a proper national infrastructure bank must instead be a wholly owned government corporation with non-partisan directors appointed by the president and confirmed by the Senate. These directors should be experts when it comes to infrastructure and macroeconomics. They should include women and men with proven expertise in heavy construction, business, labor and government policy. And in order to make the bank as informed as possible about America’s diverse infrastructure needs, the bankshould, like the Federal Reserve, be regionalized into operating districts.A second challenge for the bank will be melding project selection with current and future national needs. Not every road project should be approved, not every urban project should be favored, and certainly no project should irreparably damage the environment. The bank’s board will need to be Solomon-likein its stewardship. But by having experienced directors and devolving power across the country, the bank I’m proposing will more likely make the right calls than would either Congress or a Washington-centric band of technocrats.Finally, the bank has to avoid leaving cities and states drowning in high-cost debt. To make sure this doesn’t happen, my proposed bank avoids Wall Street entirely. Instead, complemented by support from the U.S. Treasury, the bank would be primarily capitalized with and find its liquidity from $1.5 trillion in long-term loans from America’s large state and municipal pension plans, as well as by some of the world’s largeoverseas sovereign wealth funds (like Norway’s massive oil-rich permanent fund). The interest rate on these loans would be in the range of 3 to 4 percent. This may appear low, but it is actually consistent with the interest rate these plans and fundsearned over the last decade on their fixed-income assets.It would, in other words, be a good investment. And to meet these returns, cities and states won’t have to make tolls, tickets, and fees astronomically high. Unlike Trump’s plan, this bank would lead to infrastructure that is affordable for Americans....For six consecutive administrations, presidents have had three overriding objectives for funding moneymaking infrastructure. First, finance all of the infrastructure projects that are beyond the capabilities of states and cities–not just some of them. Second, prioritize projects in a fair and efficient manner. Third, minimize the federal government’s contribution. The National Infrastructure Bank I’m proposing, with its specific characteristics, is designed to achieve these objectives. It will fund infrastructure that’s affordable, accessible, and dearly needed. It won’t drain federal coffers. Democrats in Congress should now show their leadership and reach out across the aisle and to President Trump to pass legislation that creates this institution.At the same time, however, Democrats in Congress need to strongly resist pressure to cut a less than perfect deal. They should oppose infrastructure packages that leave some projects behind or that overburden user communities with exorbitant fees. While our nation’s infrastructure needs are great, they are not dire. We can afford to wait. And if President Trump and Senate Republicans refuse, or if they insist on the President’s unacceptably costly and unfair pro-Wall Street plan, then Democrats should wait until they control both chambers of Congress and until we have a new President. American infrastructure has had too many patchwork fixes. It’s time we get this right.
The 115th Congress' Transportation and Infrastructure Committee consisted of 33 Republicans and 27 Democrats. That number will be at least reversed in the 116th. Several Democrats will therefor be added, not to mention that 3 Democrats from the committee-- Elizabeth Esty (New Dem-CT), Richard Nolan (D-MN) and Mike Capuano (D-MA)-- are leaving Congress, making more room. aside from losing a number of positions on the committee, 10 Republicans were defeated or are retiring, including ex-chairman Bill Shuster. The new ranking member is Sam Graves of Missouri since two of the guys slated to take over after Shuster-- Johnny Duncan (TN) and Frank LoBiondo (NJ) both retired.When you see those ads from the California tourist bureau touting the state as a vacation getaway, it's all about the beaches and L.A., San Francisco and San Diego, not about the beautiful, if remote northeast part of the state where congressional candidate Audrey Denney grew up on her families farm. Her part of California is a mostly small town and rural, a world apart from Hollywood or Silicon Valley. And infrastructure is one of the issues Denney has been hammering on-- perhaps more so because the GOP incumbent she's running to replace, Doug LaMalfa, is a do-nothing member of the House Transportation and Infrastructure Committee. This morning, Denney told me that "The crumbling infrastructure in my vast district puts us at an economic disadvantage and threatens lives. It is one of our most pressing issues. Much of CA-01 is made unnecessarily remote by poorly maintained roads and a lack of highways, which discourage investment, raise costs for businesses, and increase road accidents. Lack of broadband internet and cell service in large areas of the north state inhibit access to public safety resources, education, services, and economic opportunities. Additionally, the Oroville Dam spillway disaster that happened in our district in 2017 showed us all just how critical is the need for maintenance, repair, and improvement to California’s aging water infrastructure system."
