Four members of the U.S. House of Representatives have introduced new legislation that would invest in infrastructure and pay for it through a newly created Infrastructure Bank for America.
Reps. Dan Meuser (R-PA), Daniel Webster (R-FL), Tom Reed (R-NY), and Doug LaMalfa (R-CA) introduced HR 7231, the Infrastructure Bank for American Act of 2020, which would support wholesales lending to infrastructure projects through state and local governments, as well as state infrastructure banks and private entities.
“America’s infrastructure is in critical need of modernization,” Meuser said. “Although there is bipartisan consensus on this issue, the sheer magnitude of needed investment exceeds the budget and borrowing capacity of states and the federal government. The Infrastructure Bank for America would serve as a significant supplement to existing funding sources through private investment that would increase access to capital for worthy infrastructure projects across the nation, without putting the burden on taxpayers. This new mechanism will help to safely rebuild America and strengthen our economic competitiveness with the rest of the world.”
According to the legislation, the Infrastructure Bank for America would provide state and municipal borrowers with funds it would be able to acquire at a lower cost. This would provide those borrowers with a cost-saving mechanism to invest in infrastructure projects.
“America’s infrastructure is long overdue for critical repairs and needed advancements,” said Rep. Webster. “This bank will work with state and local partners to facilitate private infrastructure investment, creating a needed mechanism for states and municipalities to access necessary funding.”
Lawmakers said the bank would not replace existing funding sources, but augment them instead.
“The IBA serves as a compliment, not a replacement, for existing programs and encourages states and municipalities to pursue all available funding sources,” Webster added. “While federal infrastructure investment is critical, the current level of resources from the federal government will not address America’s current infrastructure needs on its own. The Infrastructure Bank for America will work with state and local governments to identify priority projects and infuse private capital to address our critical infrastructure needs.”
And money from the bank would come from and stay in American communities.
“We care about supporting communities across the country who have long lacked access to the capital needed to upgrade aging infrastructure. By facilitating unique public/private partnerships at the state and local level, the Infrastructure Bank for American will unlock a wave of investments in critical projects that will boost economic growth and improve livelihoods,” Reed said.
The bank would be structured similarly to the Federal Home Loan Bank System, which encourages private investment through tax incentives over the first three years of its operations. Unlike prior IBS proposals, the new IBS would be entirely capitalized through private investment.
“Crumbling roads, lack of broadband connectivity, and weak electrical grids are issues that Northern Californians deal with daily,” LaMalfa said. “Despite dozens of grants and loan programs, the Federal government can’t fund every infrastructure upgrade across the country… This bank will provide a safe financial return for Americans by putting their funds back into their own neighborhoods. We need to focus our efforts on our own infrastructure because it’s what our citizens care about. It’s an improvement in quality of life for us and future generations.”