About the Problem

America’s roads, bridges, public transportation systems and electric and broadband infrastructure are in increasingly poor conditionD+

Infrastructure

About the Policy

Create a new institution (e.g. an infrastructure bank) that relies on public-private partnerships to design, build, finance, operate and maintain public infrastructure. The idea is to take a comparatively small amount of public funding and leverage it to attract significantly more private sector funding. The infrastructure bank would be federally funded and controlled and led by a bipartisan group of experts who would select locally proposed construction projects. The selection would be based on a broad range of criteria including necessity, costs and benefits and funding would be provided through loans and loan guarantees. The repayment of the loans would take place through the collection of taxes, tolls and other dedicated revenue streams and could be undertaken through an array of partners, public and private, for each eligible project.

Public Support

62% of All Polled
68% of Democrats
57% of Republicans
59% of Independents

Polling data derived from three national surveys conducted by Cohen Research Group in February and March 2016. Each survey had a sample size of at least 1,000 registered voters with a margin of error of +/- 3.1%

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Both Republicans and Democrats agree: U.S. infrastructure is falling apart.

But national, state and local leaders can’t agree how to pay for it.

Government budgets are strained at every level, making the large scale public infrastructure investments that defined the 20th century increasingly difficult.

According to the American Society of Civil Engineers, there is a $4.7 trillion gap between the infrastructure funding America needs through 2040 and the funding that is expected to be available.

This type of gap will not be filled by marginal increases in traditional sources of public funding.

One option to spur investment in infrastructure is to designate a federal infrastructure bank that could leverage a comparatively small amount of federal funds to attract a much larger multiple of private sector investments.

Here's how this would work:

Congress appropriates the initial investment for the bank. That startup money gives the bank enough capital to start lending to projects and earning interest.

The bank identifies projects based on strict criteria. Decisions could be made by a bipartisan board, headed by a commissioner who is appointed by the President. Though the details can be debated when the bank is formed, the idea is for the bank to identify large-scale public transportation, energy and water infrastructure projects. Depending on the size of the bank and of the project, the bank can lend to a select number of high cost projects across the country.

Each loan from the infrastructure bank can be paired with additional private sector investments alongside it. With the government vetting and making initial investments in infrastructure projects, it can help attract private sector investors alongside it.

Tolls and user fees regenerate revenue and repay the loan. By choosing projects based on their ability to repay investors, the system will be self-sustainable.

Though there is room for debate on the exact structure of the bank, its board of governors, and its regional administration, creating a federal bank exclusively focused on funding American transportation and public works would provide significant progress toward closing the funding gap. Though repairing U.S. infrastructure may appear to be an expensive undertaking, infrastructure investments can often effectively pay for themselves by helping to stimulate more economic activity. Moreover, infrastructure is a problem that gets more costly to deal with the longer you wait.

That’s why it’s time for a new U.S. infrastructure bank.