Transportation Secretary Ray LaHood has renewed his call for the creation of a national infrastructure bank by proposing a $4 billion National Infrastructure Innovation and Finance Fund, which would invest in big-ticket projects of regional or national significance.
LaHood: thumbs-up for
The bank would identify large, high-value projects for funding and then put the $4 billion from government's general fund together with state, local and private-sector dollars to fund the projects using a mix of loans and grants.
The Highway Trust Fund is insufficient to fund all the things we want to do
“The idea is that we would fund big, significant projects where you can really make a difference,” LaHood said.
He added that the prospects for getting the bank included in the Department’s fiscal year 2011 budget are “very bright”, despite the fact that last year Congress ignored a budgetary proposal for a similar, $5 billion infrastructure bank.
“There’s a great deal of interest in this concept in the Senate,” LaHood said, “and I believe that the fact that the president talked about it during the [election] campaign as a way to fund large, significant projects around the country is going to have some pretty good standing.”
The idea is that we would fund big, significant projects
The proposal, part of a $78.8 billion 2011 budget for the Department of Transportation that would give it nearly $2 billion more than its 2010 funding level, comes less than a week after Obama proposed a three-year partial freeze on the federal government’s discretionary spending. Transportation department chief financial officer Chris Bertram said the freeze would not impact transportation priorities for Obama.
“It’s not an across-the-board freeze on every single account, every single agency. The president in his proposal has made sort of some choices where he wants to invest funding,” Bertram said, pointing to the $4 billion infrastructure bank and $1 billion budget request for high-speed rail as examples.
Our goal has always been the 18-month extension
However, budgetary amounts across surface transportation spending like highways will continue to function on “placeholder” levels identical to last year, Bertram said, declining to say that they are “frozen”.
The government’s transportation budget has already faced an effective standstill at current levels, as a result of a looming battle over the reauthorisation of a multi-year spending programme. Congressional leaders have proposed an ambitious $500 billion, six-year transportation bill, while LaHood has come out in favour of a shorter, 18-month measure. As a result, Congress has been reauthorising transportation spending along existing spending levels since the end of September 2009, when the previous budget expired.
“Our goal has always been the 18-month extension,” LaHood said. “As we work this year with Congress on getting to a final bill, the biggest dilemma for us all is finding the $400 to $500 billion, given the fact that the Highway Trust Fund is insufficient to fund all the things we want to do,” he added, referring the government’s gas tax-backed financing mechanism for highway infrastructure.