Better highways and bridges or yet another federal government agency?   

The Obama administration push for a federal infrastructure bank is getting a lot of press these days as proponents argue that we will put people to work and improve our highways and bridges. What’s not to like? Well in fact, both the federal and many state governments already have infrastructure banks or programs that perform the same function. At the federal level we already have the Transportation Infrastructure Finance and Investment Act (TIFIA) which provides loans and loan guarantees for highway projects. At the state level,33 states already have infrastructure banks, one example being Oklahoma which started its bank in the 1990s but has yet to fund a project. 

So what would we get with the new federal infrastructure bank that would provide loans and loan guarantees to state and local governments for broadly defined “infrastructure” projects, not just highways and bridges? A new government entity supervised by a board of seven people selected by the president with an initial capitalization of $10 billion and an expected annual budget of $270 million, and it will take a year to set up. This is the Fannie Mae model applied to public works. How well has that model worked out in housing?

We need better highways and bridges. We also need a new highway financing bill to replace SAFETY-LU, which expired over two years ago and has now been extended eight times. We do not need yet another federal agency led by a politically appointed board deciding who gets the cookies from the federal cookie jar.