The National Infrastructure Bank idea gains adherents

“infrastructure spending” package full of unnecessary pork, Congress would provide $100 billion for the infrastructure bank to spend as its financial analysis dictates. It would evaluate the various projects that states say are necessary and pick those which would create the most jobs and do the most to strengthen the nation’s infrastructure while controlling costs.

Rohatyn adds:

The bank also could ensure that states and localities consider all other options — from wetlands preservation to implementing tolls — before structural options are funded. It would create an avenue for private investors to put risk capital into new projects and bless their involvement with the bank’s own participation. In short, it would treat infrastructure like a long-term investment, not an expense.

In other words, it might also help make even valuable infrastructure projects cost taxpayers less if there are ways for private investors to be involved. Private investors would also care more about economic viability than the average politician would.

 

The idea of a national infrastructure bank, which could potentially act as a way for taxpayers to get more for their money and make projects more efficient, sounds great — but there are obstacles.

Indiviglio writes that the first, and most obvious, is that smaller and less populous states would almost certainly fight it. If a project is not likely to benefit as many people, then it will be very hard to get the federal government to pick up the tab. “At some point you have to ask: if we agree to allow the federal government to spend money on projects, shouldn’t it do so from a national perspective that seeks to do what’s best for the country on a whole?”

 

Second, it seems plausible that the national infrastructure bankers would be less susceptible to political influence than Congress, but it is doubtful they would remain completely untainted. Just consider the fact that there would be a need to have the bank’s management appointed by each incoming administration. As a result, whatever party is in power might have the ear of those bankers, and continue to influence spending.

“Still, it’s hard to see how the possibility of political influence is worst than the current system that guarantees it, since Congress now authorizes this spending directly,” Indiviglio writes. Organizations like the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) serve as examples of government enterprises that manage to stay relatively untainted by politics, despite having their leadership appointed by presidents. Indiviglio concludes:

The bigger fear, of course, would be that a national infrastructure bank would more closely resemble the failed mortgage companies Fannie Mae and Freddie Mac. But if its charter is clear, and its projects limited to only whatever money is allocated, then it should refrain from taking on any additional risk.