A broad coalition promotes a national infrastructure bank as an answer to high unemployment, but detractors say the plan is wishful thinking.
Diverse camps are throwing support behind a proposed national infrastructure bank to create badly needed jobs while building roads and other public projects.
The concept of an infrastructure bank has been supported by the U.S. Chamber of Commerce, the AFL-CIO and a bipartisan coalition of mayors and governors. The groups understand the bank could be a key component of a national strategy that creates “good, well-paying jobs, rebuilds our middle class and provides us with the 21st-century infrastructure we need to compete,” said Rep. Rosa DeLauro (D-CT), who has worked to pass an infrastructure law since 1994, in a letter last week to The Wall Street Journal.
The latest bill, H.R. 402 proposes an infrastructure bank based on the European Investment Bank, which has successfully provided long-term financing to a range of public projects since 1958, DeLauro said. The United States, one of the few leading nations without an infrastructure bank, lags behind in infrastructure development.
Legislation co-sponsored in the Senate by John Kerry, (D-MA) and Kay Bailey Hutchinson (R-TX) would create a government agency to facilitate private investment in public projects. The law would enable the federal government to guarantee private loans and provide cheap loans that would serve as seed money for private investors supplying the bulk of the financing.
An infrastructure bank could play a key role in the jobs initiative introduced last week by President Barack Obama, who has long championed an “I-Bank” to lift the nation’s struggling economy. Obama’s tenure has been one of stubborn high unemployment, weak growth and declining consumer confidence.
Investors surveyed by Millionaire Corner in June expressed deep pessimism about the job market. More than 44 percent of investors with less than $100,000 said they were worried about themselves or someone in their household losing their job. Few (less than 22 percent) expect the job market to improve in the next year.
Most affluent investors surveyed in December said that reduced unemployment, not a stock market rally, would signal the economy is on the right track. The investors looked for an unemployment rate below 6 percent as a sign of a robust recovery.
Critics of the proposed infrastructure bank say it would take years to get off the ground and would not provide immediate relief. Others say that even though the seed money represents a fraction of the total costs, the amounts needed might seem prohibitive to a Congress focused on debt reduction. Conservatives balk at the idea of creating more bureaucracy and expanding the role of the federal government.