Wall Street 'to the rescue' with toll road infrastructure bank
Presidential toll road bank hits roadblock in US House committee of jurisdiction.
A top congressional leader on Wednesday made clear his opposition to President Obama's idea of spending $10 billion to create a national infrastructure bank (view details). The bank, part of the White House jobs bill, would offer public subsidy for the financing of "public private partnerships" -- which most often would take the form of a toll road. The chairman of the US House Transportation Committee said at a hearing the president's plan would not advance.
"A national infrastructure bank is dead on arrival in the House of Representatives," Chairman John Mica (R-Florida) said. "If you want a recipe to put off job creation, adopt that national infrastructure bank proposal."
Opponents called the proposal a "distraction" from the issue of a long-term highway program reauthorization bill which would include funding for state-level toll road banks. Already, thirty-two states have their own infrastructure banks which have financed $6.3 billion in loan agreements along the same lines as the proposed federal bank.
"Many people are skeptical that bureaucrats in Washington would have any idea which transportation projects are most deserving of receiving a federal loan," Highways and Transit subcommittee Chairman John J. Duncan, Jr (R-Tennessee) said. "This skepticism is why Congress has already established the state infrastructure bank program in SAFETEA-LU."
In addition, the US Department of Transportation already provides federal credit for transportation projects under the Transportation Infrastructure Finance and Innovation Act (TIFIA), which has offered $8.4 billion in project finance. Dozens of other financing mechanisms are offered by the Federal Highway Administration.
"Why build one when you could build two for twice the price?" Representative Howard Coble (R-North Carolina) said sarcastically.
Democrats offered the only backing for the bank idea.
"Before Wall Street destroyed the economy, I had said, 'Well, I really don't see the need for an infrastructure bank -- most of the states have good credit and they can go out and borrow on their own at very good rates," said subcommittee Ranking Member Peter DeFazio (D-Oregon). "But that isn't the case any more. The states need guarantees, they need help, many are against their borrowing limits, and most of the banks generously bailed out by Congress -- not by me, I didn't vote for it -- aren't lending. Credit and bond markets are tight."
DeFazio only supports the use of the bank only for water, sewer and energy projects. He does not support tolls on existing interstates.
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