Thursday, March 24, 2011

'Fannie Mae' meets 'Fannie Pave' in Washington

Most Expensive Bill of the Week

The Bill: H.R. 402, National Infrastructure Development Bank Act 2011

Annualized Cost: $5 billion ($25 billion over five years)


National Taxpayer's Union Foundation
Copyright 2011

Congresswoman Rosa DeLauro (CT-3) introduced H.R. 402 to establish a public bank, which "would supplement other federal infrastructure programs, and provide investment opportunities to create jobs, spur economic growth, and help build an infrastructure for the future." As a wholly-owned government corporation, such as the housing entity Fannie Mae, the bank's financing would be backed by the full faith and credit of the US government.

The National Infrastructure Development Bank would issue bonds to eligible lenders, including regional, state, and local entities, as well as commercial banks. Funds would be directed to transportation, environmental, energy, and telecommunications projects, each requiring a different set of standards to be considered by the four committees within the bank.

The bill authorizes $5 billion for each of the next five years. Funds would serve as the base capital from which the bank would issue bonds. In the President's budget proposal, a similar bank was outlined at the same $5 billion annual cost but instead over six years.

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