The Build Act: A Chance to Build Again

Last week I wrote about the bi-partisan Build Act legislation sponsored by Senators John Kerry (D-MA), Kay Bailey Hutchison (R-TX), and Mark R. Warner (D-VA):

The legislation would serve to create an infrastructure bank that would help to close America’s widening infrastructure funding gap and create millions of American jobs in the next decade, making the United States more competitive in the 21st century.

On Sunday, the NY Times editorial board came out in favor of the legislation saying:

The bank would lend money to build big-ticket transportation, water and energy projects that have a clear public benefit. The loans, or loan guarantees, would be designed to attract private capital as well. In fact, at least half a project’s financing would have to come from the private sector. As much as $640 billion could be leveraged this way over the next decade, proponents say.

The bank would initially be funded with $10 billion from the treasury, which would be given out as loans, not grants. To make that possible, the bank would invest largely in projects that generate money, like toll bridges and tunnels, water systems backed by ratepayers, and energy projects built by utilities, governments or corporations. An independent, bipartisan board appointed by the president and Congress would choose the investments and oversee construction, audited by an inspector general and the Government Accountability Office.

By providing low-cost capital to states, cities and authorities, the bank would help these strapped governments kick-start projects that are now unaffordable, while attracting investments from pension and private-equity funds that are looking for stable money-generating ventures in which to invest. “We can either build, and compete, and create jobs for our people,” said Mr. Kerry, “or we can fold up, and let everybody else win. I don’t think that’s America.” The bank was backed by unions and the U.S. Chamber of Commerce.

The legislation builds on a propasal from President Obama  for a $30 billion bank limited to “transportation projects that would also make grants.”

The Kerry, Hutchison, Warner Build Act, instead is “designed to be more palatable to lawmakers who are politically averse to spending, but already conservatives are railing against what some have called a “boondoggle,” a phrase used to demonize virtually any public investment.”

The NY Times editorial board brings up this key point to opponents of the legislation:

What will these opponents tell voters when the dams break and the bridges fall? Before more lives are lost, lawmakers should ask themselves whether they used their public office only to slash spending (and taxes for the wealthy), or to spend money wisely.

We must fix our failing infrastructure. The Build Act will create jobs at a time when they are desperately needed. This legislation should be embraced by both parties in the Senate and the House and moved on swiftly.

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