Bonds

House bill marks latest push for national infrastructure bank

Democratic Rep. Danny Davis of Illinois has re-upped a long-stalled plan for a national infrastructure bank, saying the bank is needed to complement public infrastructure spending while acknowledging the difficult political realities of getting it through a Republican-led House.

“Most bills that get introduced never get passed, so once you understand that, you don’t worry about the ‘when’ other than to say as long as you keep trying, as long as you continue to raise the issue, as long as you continue to float the idea, ultimately enough people will buy into it or the timing may just become right, and it gets done,” said Davis, a longtime advocate of an infrastructure bank who has introduced similar bills in the past. “So, I introduce it and hope enough people will ultimately see the utility of it and see the value of it and will make it happen.”

Davis’s bill, HR 4052, would create a National Infrastructure Bank “to facilitate efficient investments and financing of infrastructure projects and new job creation.”

The bill’s text has not been published yet. In a June 13 video , Davis said the bank would be modeled on past structures like the Reconstruction Finance Corporation created during the Great Depression. It would “be self-sufficient, stand on its own two legs and require no new spending, taxes or deficit from the federal budget,” Davis said, adding that it would “capitalize on existing Treasury financial instruments held by the private sector [that are] exchanged for preferred stock.”

It is the latest effort — and the second bill introduced this session — to pursue the idea of a national infrastructure bank, which lawmakers have floated repeatedly over the years to spur private investment into the U.S. infrastructure space.

In February, Reps. Daniel Webster, R-Fla., and Colin Allred, D-Tex., introduced the Federal Infrastructure Bank Act of 2023, H.R. 490 to create an institution to work with state and local partners to encourage private infrastructure investments through loans and loan guarantees. It has been referred to various subcommittees of the House Transportation and Infrastructure Committee, where it awaits action.

Citing the American Society of Civil Engineers, Davis said $6.1 trillion is needed to repair the nation’s infrastructure, and of that $2.6 trillion is not funded, “leaving a large and growing financial gap.”

A national bank would attract private investments to help leverage the $1.2 trillion Infrastructure Investment and Jobs Act, Davis said.

“Even though we passed a good infrastructure bill – Illinois got $17 billion off of the bill – we still have many unmet needs. We still find that there are highways crumbling, bridges falling,” he told The Bond Buyer. “We’re making headway and we’re making progress but we still have miles to travel and roads to rebuild.”

The idea for a national infrastructure bank goes back decades, with President Obama proposing one in 2008 and in 2010. More recently, the 2021 Infrastructure Investment and Jobs Act would have created a bank, but the provision was stripped out at the last minute.

Among other opponents, some municipal market groups, like the Bond Dealers of America and the American Securities Association, have opposed the bank. They are skeptical of the need considering the muni market’s traditional role in infrastructure finance and believe federal lobbying efforts should focus on reinstating tax-exempt advance refunding bonds and expanding the current financing tools.  

A national infrastructure bank has in the past won bipartisan support, but Davis acknowledged that high-stakes partisan disputes over spending are likely to dominate much of the session.

“This session is tough for but anything other than basic operational aspects of government,” Davis said. “To come up with something that both sides agree to is not the easiest thing in the world because they’re both moving toward the 2024 elections,” said the long-time congressman. “Sometimes it may take a bill 20 years to get passed, sometimes 20 months, sometimes 20 weeks. But if it’s never introduced, it never gets passed, it never gets considered, it never gets heard.”

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