In his speech in Milwaukee yesterday, President Obama laid out a proposal for smart, responsible investment in economic growth by addressing the urgent need to improve our nation’s infrastructure. Compared to other economic measures that have been put on the table, economists tell us that infrastructure financing will generate the most bang for our buck, and businesses tell us it will create jobs where we need them now and at the same time produce long-lasting benefits for our economy. Under normal circumstances, a national infrastructure bank is a great idea. In the current economic environment, it’s a necessity.
The President is sending a strong message this week that his administration’s thinking has moved beyond another round of scattershot stimulus toward a real plan for sustainable growth. Today’s speech suggests that the mantra for spending has changed from an obsession with injecting federal spending to thinking rationally about actually investing it. That’s welcome news, and it’s not a moment too soon.
PPI has been hard at work with members of Congress, industry experts, and economists to identify swift and effective steps for fixing our infrastructure problems and putting the country on a better path to economic growth. We have supported legislation to create a national infrastructure bank, introduced by Congresswoman Rosa DeLauro, who has taken the lead and been the real champion on this issue in Congress. She will discuss the bill at PPI’s infrastructure policy event on October 1, in conjunction with the annual CG/LA Infrastructure North American Leadership Forum in Washington, DC.
Rep. DeLauro and other elected officials will join Tom Friedman, Leo Hindery, economist Ev Ehrlich, and top business and labor leaders to discuss the best ways to move forward on infrastructure now. The conference will also examine CG/LA’s list of the top 100 infrastructure projects that represent the most important and urgent priorities for investment.
At a time when deficits are high and every dollar counts, leveraged infrastructure financing is one of the smartest things the federal government can do for the economy. When compared to other forms of spending and tax cuts, including the costs for the hotly-debated upper end of the Bush tax cuts, infrastructure spending has a stronger impact on the economy. In fact, it blows most other options out of the water. Even conservatives who argue against further spending right now would agree that if we’re going to spend, this is a much better use of taxpayer dollars than other less productive programs that simply throw money at short-term problems.
The idea behind the infrastructure bank and the new generation of transportation funding programs is to use public financing as seed money to attract private investment, which adds valuable leverage to every taxpayer dollar. This potent combination of funding will create jobs that can be counted on for years in the hard-hit construction sector and will result in long-term structural benefits for every sector of our economy, including increased productivity and more efficient transportation for our goods and services.
Make no mistake: the proposals the president spoke about today are not the old-school pork projects that many of us think of when we hear anyone in Washington talk about infrastructure. Creating an infrastructure bank is not about allocating more money for Congress to build “bridges to nowhere.” Instead, it would help bridge the gap that exists between private-sector capital and the financing needs for modernizing the physical backbone of our economy. By coordinating and prioritizing public needs and relying in part on the market for investment decisions, we can move private capital off the sidelines and into projects that are strategically important for entire regions and for the nation as a whole, not just for one congressman with the right committee assignment.
President Obama and Rep. DeLauro have their work cut out for them in pushing the proposal for an infrastructure bank and smarter transportation investment through Congress, especially in such a charged political atmosphere. But the President has picked the right fight at least: the fact is that we badly need to upgrade our infrastructure, and it’s an investment that will create steady job growth and generates long-term value for our country. It will not be an easy fight, but it’s one worth fighting, and President Obama should be commended for taking it up.
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