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US National Infra Bank ‘dead on arrival’

Predictably, a US Congressional hearing yesterday on President Obama’s proposal for a National Infrastructure Bank condemned the idea as unecessarily bureacratic. The proposal has become a politically divisive issue, with leading opponent John Mica effectively saying it was doomed.

A Congressional hearing into the Obama Administration’s proposed National Infrastructure Bank said the idea would only add to the red tape and federal bureacracy that already slows down and diverts funding away from transportation and infrastructure projects.

“We must use every responsible mechanism possible to move projects and expand our capacity to finance infrastructure maintenance and improvements, but a National Infrastructure Bank is dead on arrival in Congress,” said Florida Republican John Mica, chairman of the Transportation and Infrastructure Committee, in a statement. 

Mica said the required banking structure for infrastructure projects already existed through the 33 state infrastructure banks, a foundation which he said should be built upon. He also said there were existing financing programs serving the same purpose as a National Infrastructure Bank, such as TIFIA (Transportation Infrastructure Finance and Innovation Act) and RRIF (Railroad Rehabilitation and Improvement Financing).

“A National Infrastructure Bank that will require more than a year to create and $270 million to run is not the answer,” insisted Mica. “That is funding that should be used for infrastructure, but would instead be used to create more red tape.”

Ron Utt, a senior research fellow at the Heritage Foundation, a conservative think-tank, echoed the thoughts of Mica. “In this era of fiscal austerity and yawning budget deficits, wouldn’t there be better uses for this money than a redundant bureacracy?” he asked.

The issue of a National Infrastructure Bank has become a hot-button political issue. Democrats questioned why the lower chamber of Congress, which has a Republican majority, was bothering to stage a hearing on the proposal when it already opposed it. “The majority appears to have already made up its mind about this proposal,” Texas Democrat Eddie Bernice Johnson told political website TheHill.com.

In early September, President Obama spoke of his vision of a national infrastructure bank when unveiling his $447 billion job stimulus package. Senator John Kerry, a Massachusetts Democrat, said the proposed $10 billion bank could unlock almost $200 billion in private capital for investment in infrastructure.